EA's Dr. Andrew Garrett: Skip the PlayStation3

In the wake of my somewhat incendiary post on Electronic Arts (ERTS), I discovered an interesting comment on the blog FreeRepublic.com from Dr. Andrew Garrett, a game developer for EA. By way of background, Dr. Garrett is a major dude, having joined EA in early 2003 as part of a major hiring spree. Here is a quick bio that was posted on the blog MegaGames in the wake of a spate of senior EA hires from Hollywood:

Dr. Andrew Garrett: Joins EALA from Dragonstone Software, where he developed scientific engines for moving hair and clothes on game characters, and artificial intelligence routines for more than 35 creatures in the Dragon's Lair 3D game.

So, here is the comment Dr. Garrett made this afternoon (it is comment #12):

I make video games, currently working for Electronic Arts on the latest Command & Conquer. Last year, the prediction was that Sony (SNE) would win the next-gen war, that the PS3 would be the dominant console, just like the PS2 was.

That is no longer the case. The extremely strong performance of the [Nintendo (NTDOY.PK)] Wii, combined with the miserable performance of Sony has revised pretty much everyone's expectations. Right now, most of us here think the [Microsoft (MSFT) Xbox] 360 will be on top for this generation, with the battle for second place between Sony and Nintendo (and that's a major shock, as we'd nearly written Nintendo off for the non-handheld market.) Most of us still think Sony will beat off Nintendo, simply due to the older graphics on the Wii, but it's not a sure thing.

My opinion - get the 360 and/or the Wii. Skip the PS3 unless there's a big change in the near future.

Drew Garrett

Now, let's remember, folks, I AM NOT A FANBOY OF ANY STRIPE. Here is a comment I posted a few days back in response to some heated (and almost angry) comments following from Tuesday's post that should clarify my position on EA, single stock investing and my approach to single stock posts:

Hi Dave, thanks for commenting. I knew this day would come, when somebody would blow a microchip on my blog. First of all, Dave, deep breaths. Ok.

Now either you've never read [my posts[ before or you haven't been paying attention, but I don't [care] about ERTS per se or any other single stock I write about. I don't own single stocks, nobody in my company owns single stocks, I don't have material influence over any company that deals in views on single stocks. Are we clear? No conflicts, right?

When I write on single stocks, it is strictly a reflection of data and perspective that is extracted from the vibrant Internet dialogue. Period. All I do is "connect the dots" and use data and my own prose to express what I am seeing. No axe to grind, no agenda, no nothing except my desire to leverage my company's tools to contribute to the body of knowledge around single stocks some people care about.

And as it relates to my being "Kreskin," well, if you've read my earlier posts on Sony, Electronic Arts and Nintendo, the Internet HAS gotten it pretty right. Read: not me, pal. I take zero credit. The Internet. It was the Internet that back in May raised the issue of the blue laser diode shortages that would inevitably hurt the supply of PS3s come Christmas season. It was the Internet that highlighted the reactions at E3 concerning the Wii, getting the ball rolling on the excitement that carried through launch. It was the Internet that shined a bright light on the issue of the disparity in development costs between PS3/Xbox 360 and the Wii, further upping the stakes for game developers focused on the first two platforms. That's not me talking, Dave. It's the Internet.

You don't have to like what I'm reflecting. You can think its full of [&!*%]. And that's ok. But don't point your finger at me, Dave. Because I really don't care. Stomp your feet and argue your points on your blog. And hopefully you'll be persuasive and change the tone of the discussion.

Best, Roger

So anyway, I thought my readers would find Dr. Garrett's comment both interesting, insightful and consistent with everything I've been talking about for the last three months. And he is an insider. I am just, well, me. So if you don't trust my opinion, maybe you'll trust his.

Comments

[Tom B:]

I think it is way premature to bet against the PS3. I am not an SNE fan boy-- I sold about a year ago at $50--but the PS3 IS technically the strongest product, with the best game support. The BluRay makes the unit look almost like a bargain, since 100% BluRay penetration in PC's is likely totake 2-3 years.

2007 Feb 12 09:48 AM

[Richard Alv...:]

I disagree. Even "if" technically the PS3 is more powerful (i say "if" because it's debatable), the need for creative thinking cancels that strength out.

ex. Pretty games that don't play well, will not sell systems.

As for game support.... that's shrinking fast for Sony. Once exclusive games like Grand Theft Auto and Virtua Fighter are making there way to the Xbox 360, with many rumored to follow.

I believe the majority of the game community gave up on the PS3 back in May of last year at E3.

2007 Feb 12 01:28 PM

[Muzie:]

Mr. Ehrenberg,

I have to say I find your article extremely speculative and frankly, very thin on actual content. Some comments:

- As a videogame developer myself I could only laugh out loud when I read your mention of Mr. Andrew Garrett as an "insider" - by that definition any one of the other 7000 employees employed by EA would be an insider, in fact, any developer within the industry (which would include myself, as I've been working in the industry for aout 10 years now) would fit your very broad description. Moreover, not to rattle on Mr. Garrett, but his credits listed on mobygames.com shows his first released title was 4 years ago, which barely qualifies him for even senior status at most videogame industry companies.
- Your "insider source" is working on Command and Conquer 3, a game slated for release on the PC & Xbox platforms only. Since your source is not actively developing on the PS3, one can question what competence he has commenting on a platform he has ever worked with.
- Either way, it does not matter - I could buy that Mr. Garrett is qualified to comment on the technical merits of the PS3 (assuming he had actually developed on it), but I fail to see exactly what qualifies Mr. Garret as a stock analyst. Technical performance does not equal profits. The first Xbox was well known in game developer circles to be higher performance, more flexible and generally easier to work with, and that still didn't make it the no.1 console at that time.

As an "insider" myself (by your definition), I can tell you this:
- The portfolio of games on each console will determine which console wins
- Price will (still) play a huge factor
- Technical performance will not matter
- The PC is making a comeback, competing for console dollars

These are my insights. Then again, I don't think I need to be an industry insider to see those things.

2007 Mar 12 08:05 PM