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Michael Murdoch  

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  • Though Electronic Arts' (EA) Star Wars: The Old Republic has received more hype (and probably a much larger budget), Sony's (SNE) Star Wars: Clone Wars Adventures, a more casual, kids-focused game, might prove a bigger hit. Sony boasts Clone Wars Adventures, which has both free-to-play and subscription options, now has over 10M registered users. EA, meanwhile, claims to have 1.7M paying subscribers for The Old Republic.  [View news story]
    EA has no new content until next month, its massive overhaul. Most people have played through the entire game 2-3 times.

    Senticar, eyeballing the various servers' gaming hubs (called fleets), I'd say it's closer to 500-600k subs based on attrition relative to the numbers I jotted down when it started, which is still profitable, though not a rip-roaring success. I have no idea why EA can't just release honest conversion numbers, they're respectable.

    The conversion numbers will be further skewed by "friend invites", which are passes for a month of free play.

    SWTOR is performing middle of the road. April is make or break. Most likely, the game will continue to perform at its current level.

    Syndicate and Kingdom of Amalur sales and budgets are what interest me at the moment. Mass Effect 3 is obviously a major hit.
    Mar 13, 2012. 03:14 PM | Likes Like |Link to Comment
  • Online Gambling Players Like International Game Technology Tip Their Hands [View article]
    Thank you for your comment slakki, many of the companies listed in the article have positioned themselves for online gaming.

    IGT, Bally's, WMS, Konami Gaming, and Aristocrat are the big video slots players. I was actually surprised that, as far as I know, Konami Gaming, WMS, and Aristocrat haven't made a move on this. WMS and IGT both have online slots in the UK. A move like this would give the listed players an early advantage

    Personally, I tend to think IGT's movie and game themed slots seem to have a lot going on that people enjoy. Ditto Konami with their use of graphics and paylines.
    Feb 27, 2012. 11:19 PM | Likes Like |Link to Comment
  • Cracking The Konami Code [View article]
    Thank you for your comments BruceInKY. Much appreciated.
    Feb 14, 2012. 01:11 PM | Likes Like |Link to Comment
  • Cracking The Konami Code [View article]
    Thank you for your comment bd4uandu.

    Yes,Yu-gi-oh is still popular. I did some research and attempted to watch tidbits of some of the cartoons. Even now, I only vaguely have an idea what Yu-gi-oh is about (playing cards and dragons) but they have an hour and a half of it every Saturday.

    I tend to think KNM's a fairly solid stock, esp. for video games even if there are other companies sitting on more cash. The Nikkei worries me a little bit lately, though.
    Feb 13, 2012. 09:23 PM | Likes Like |Link to Comment
  • What GameStop's New Dividend Means For Investors [View article]
    Yeah Gamefly got D2D, which is a smart acquisition in my opinion, since Gamefly's own business model was just insane (I'll go into it if you want). They had no discernible way to make a profit. I'm surprised Gamefly could afford to purchase anything, given their embarrassing history with the Post Office. Though it seems they did finally eke out a win. Good luck collecting from Uncle Sam, though.
    Feb 13, 2012. 01:12 PM | Likes Like |Link to Comment
  • What GameStop's New Dividend Means For Investors [View article]
    Thank you for your comment and your good taste in pop music thetruth2012.

    I think the key here is credit cards, consoles and console DLC. If you think about it, the street doesn't realize, guess what, kids, illegal immigrants, or people who just prefer cash buy games. Lots of games. Because of people living off the grid, "digital currency" will never be a complete reality.

    I honestly like GME a lot, they've a solid business model.

    The short as outrageous though. If you have brass ones, this is a stock to make some money with some bold contrarian strategies.
    Feb 13, 2012. 01:09 PM | Likes Like |Link to Comment
  • MW3, World Of Warcraft, Diablo III Key To Activision's Earnings And Outlook [View article]
    Nice work as always.

    I especially liked the Skylanders comment. That's a good piece of IP. I generally bash Kotick for playing too safe, but that was a high quality release. Use of the Toy Story people was top shelf. Seems to have Pokemon/Yu-gi-oh potential with the crossover collectible market with those figures.

    You going to E3? I'm doing up my paperwork.

    Do you know how much ATVI gets get in licensing from Netease (NTES) et al for WoW? I'm always looking for that. Reading the NTES 20-F. Couldn't find it in ATVI's stuff.
    Feb 11, 2012. 10:29 PM | Likes Like |Link to Comment
  • After The Earnings Call: Taking A Closer Look At The Electronic Arts 2012 Product Line [View article]
    SWTOR is big, it's pretty good, and it's successful (it'll break even at the least at this point), but EA needs to get content out there for it to be truly successful. They have a "big update" coming in March but they need to get on it (level 50 sage, here).

    If they have sense they'll release an expansion pack around when GW2 hits. If SWTOR can maintain a decent subscriber base, it will be outrageously profitable. EA needs to get on it. Founder's medal is nice, but they should be doing something each month.

    Personally, I think GW was a great brand and that NCSoft does high quality stuff. Their GW pricing model is interesting too. I think GW2 could go either way though. GW had relatively little hype. GW2 has Skyrim kind of hype. It better be a Skyrim quality game, or there'll be disappointment a la Rift.
    Feb 10, 2012. 06:27 AM | Likes Like |Link to Comment
  • After The Earnings Call: Taking A Closer Look At The Electronic Arts 2012 Product Line [View article]
    Thank you for your comment baneslayer,

    I assume you mean it's "buy to play". Fair enough.

    I use F2P where you might use B2P. I debated putting B2P, but I didn't want to make the article too much of a slog on pricing models. It gets rather confusing when you get into F2P - ad-supported, F2P/Freemium, F2P/conversion upsell, B2P (what I'd consider Guild Wars and its ilk). I honestly think they're all variants of the dominant subscription model and can be safely lumped together as "Free to Play" alternatives for now. Your opinion on the matter is quite valid though if you prefer the "Buy to Play" terminology.

    I plan to do an article comparing the Shanda "F2P" types with the NCSoft B2P types based on conversion and purchase in $/mth at some point. I need to find hard numbers though from the Koreans.

    My major problem is I don't speak Korean though. If you do, or know someone that does, tell them to message me.

    Reconciling EA's GAAP and non-GAAP is an article unto itself - which I'll write at some point with the aid of my reading glasses, a red pen, a legal pad, and a very large pot of coffee.
    Feb 10, 2012. 05:16 AM | 1 Like Like |Link to Comment
  • After The Earnings Call: Taking A Closer Look At The Electronic Arts 2012 Product Line [View article]
    No idea, really, other than idle speculation.

    From my understanding the WAR sub numbers aren't that good, but on the plus side, they're not going F2P.

    WOH is F2P. Not out yet. Looks a lot like WoW (again), which kills me because Blizzard basically stole the Warhammer Fantasy IP. Seems to be PVP only, which is more the Korean style of casual/MMO.

    Much of the original Warhammer Online team was used for the SWTOR MMO. Check Mobygames for overlap. Off the top of my head, I know much of the SWTOR PVP team worked on WAR.

    I'd imagine with WAR, like most MMOs, they'll try to bleed it dry. License is an issue too. I don't know what the terms are and contract reversion, etc. That's a confound. They may keep it around or be releasing WOH just to keep the Warhammer Fantasy license (see Roger Corman's Fantastic 4 for more on how this works).
    Feb 3, 2012. 08:39 PM | 1 Like Like |Link to Comment
  • After The Earnings Call: Taking A Closer Look At The Electronic Arts 2012 Product Line [View article]
    Thank you for your comments Throbar. You raise some good points.

    Which specific EA freemium products were you referring to if you don't mind my asking? I'm not a freemium fan either. Personally, I think the allegedly "freemium" Battlefield mobile will really be an advertisement. Most people "in the know" realize freemium is currently a phenomenon that only "sells" in Asia. I think EA probably realizes this too and is why they're dragging their feet. TBF though, Battlefield fans are so diehard they might actually spend money.

    Regarding Europe, do you know what they mean regarding their partners? You think it's just sales? I thought the prepared statements was referring to something else, but I could be wrong. It all seemed a bit rather cryptic.

    I'm curious if PopCap will be involved in the 2013 social game mentioned in the report. Your points regarding culture in acquisition of "creative" companies is on target. Whether or not to gut management of these acquired companies is always a concern, a very valid one.

    I haven't really seen anyone work freemium decently with microtransactions stateside. The asian gaming companies have made a fortune doing it though, so maybe the potential's there in the future. Shanda immediately comes to mind, where one kid was so into the game (World of Legend I think), he threatened to self-immolate in the corporate office.
    Feb 3, 2012. 06:53 PM | Likes Like |Link to Comment
  • After The Earnings Call: Taking A Closer Look At The Electronic Arts 2012 Product Line [View article]
    McFarlane's involvement actually initially worried me because Evil prophecy (Ps2) was critically and commercially ill-received (I played it, it was terrible). Ditto the presence of Schiller and and Salvatore. It screamed "too many cooks spoil the broth" but I've been hearing really good things about the game and its pre-orders look surprisingly decent. It's a wild card, but it might pay off.

    Also, people in the know say Schiller apparently played ungodly amounts of games, which surprised me.
    Feb 3, 2012. 06:40 PM | Likes Like |Link to Comment
  • After The Earnings Call: Taking A Closer Look At The Electronic Arts 2012 Product Line [View article]
    Thank you for your comment, crimson.

    As I note above, PopCap is a dominant force in the iphone market. I don't think it's a fad. Personally, I prefer core games, but plenty of people buy casual games.

    PopCap produced a number of exciting casual games on a variety of platforms including PC, Xbox live arcade and others. IMO, Plants vs. Zombies was the best casual game since Tetris. I've played a good portion of their product line. Play it, really it's good. Peggle was another winner. They have a lot of really good casual games and they sell well.

    The revenue multiple for PopCap is 10/1 assuming the 1b purchase price and provided figures (see above). That's good. Maybe you could clarify what multiple you're referring to.

    PopCap also provides EA market access to the previously neglected female segments of the market (who tend to be a prominent demo on FB, myspace, pinterest), who are rarely core gamers.

    Regarding your venture capital comment, I agree somewhat, especially when it comes to AH, DST, etc ventures. However, the usual suspects weren't involved in PopCap. I generally take press releases from any of the usual suspects with a grain of salt though.

    Battlefield 3 ALREADY did very well. It came out already and was in the most recent report. It sold 10 million copies. Please see the reprt for more details, it's cited in the article.

    As I note above, NCSoft's Guild Wars 2 provides substantial competition for SWTOR. The beta is set for the summer and release, as far as I've been hearing is set for December-ish. It's not uncommon for MMOs to be delayed though. Once the beta is out, I'll know exactly how much competition because I'll start to hear things.
    Feb 3, 2012. 06:37 PM | Likes Like |Link to Comment
  • After The Earnings Call: Taking A Closer Look At The Electronic Arts 2012 Product Line [View article]

    I haven't been following them, really so I don't know their financials, but I'll give you what I know off the top of my head and some industry feeds.

    I know they're fairly weak though. At their price (dollar stock?) a takeover wouldn't surprise me (aren't they on the verge of being delisted?), but I can't really speak to that. Not really something I have a knack for. Not a merger guy. Or good on short trades.

    Heck, I wish one of the Japanese companies would take them over for a reverse listing. That'd be nice. I doubt it. Look for Bethesda, Rockstar, Taketwo, EA to be interested in a fire sale on IP. Saint's Row, WWE, UFC, Warhammer, Darksiders are all solid franchises. Depends on the contract's reversion clauses too, esp for Warhammer. Games Workshop may retain rights if a game isn't published in X years.

    The product line I can speak to. On the whole, it's weak. They've grown some decent IP recently in the form of the UFC, Saint's Row, WWE games and Darksiders (which sold 1-1.5m off the top of my head - good but not great), but WWE and UFC both are licenses which eats into profits.

    Darksiders 2 may be a make or break moment for the company. They also have a bunch of terrible licensed kiddie games that were impacted by dismal 3DS sales (2m below projections on the latest Nintendo report if memory serves) and casual games.

    It has some disasters, too. Udraw undersold during the holidays (by a lot). I have no idea how they thought that was a good idea. Peripherals like that don't sell in America. They pretty much bet the house on that.

    Their casual social game Margaritaville is set to lose a fortune. 2 reasons 1) Jimmy Buffet's people are notoriously difficult to work with (PM me if you want) 2) It's a bad ripoff of Zynga's Farmville

    Their Warhammer 40k MMORPG, given their management, will bankrupt the company. They're looking for partners last I heard.

    I have something good on tap, based on my research and fairly extensive reading of the journals and my hands on. One I'm submitting tomorrow, the other may be a day or two while I review the financials. P/E below 15 in video games, robust product lines.

    Personally, THQ isn't right for my portfolio, but I'm almost exclusively long and mostly into value and some growth stocks (in video games and tech). I don't do mergers. I only occasionally dabble in spinoffs.

    Oh this article on GS may be of interest to you, btw.
    Feb 3, 2012. 02:59 AM | 1 Like Like |Link to Comment
  • After The Earnings Call: Taking A Closer Look At The Electronic Arts 2012 Product Line [View article]
    The Sims 3 expansions are likely profitable because you don't have to code the engine. The core game itself? No idea, but probably based on its huge sales. Unfortunately, companies in gaming still don't list budgets. You can get an idea through the trades and the blogosphere (and word of mouth) but it would promote greater transparency if they did.

    I don't know about C&C and NFS sales off the top of my head. I'd have to check From what I'm aware, neither have been very popular in their most recent iterations (C&C4, I played, NFS I haven't). If memory serves, even the more recent C&C's makes the less popular stylistic choice of using FMV and was underhyped (and from what I played, not that good), so that's not all that surprising. Black was the last successful game I can remember that used FMV. I can't speak to NFS. I'm not certain I played it.

    The sports empire operates differently because of licensing fees, celebrity endorsements (e.g. Tiger Woods), and the fact the engine is updated.

    Regarding social, I think PopCap is HUUUUUGE. If you know the industry, these are the real casual players. EA's purchase of them was much bigger in the gaming trades than the financials. The street mistakenly thinks Zynga is the casual leader, because they were the first major domestic IPO. They're not a leader. They're barely a player. They're hideously overvalued.

    If you've played a casual game in the last decade, 50/50 odds PopCap made it. 2 of the top 10 grossing iPhone apps. Most of any company.

    The big wrinkle besides PopCap is SWTOR. This MMO is BIG. If it has legs, EA will be fabulously profitable.

    I understand the hesitation, EA's finances leave something to be desired at times, esp in their overt reliance on non-GAAP financials. However, I think that SWTOR and PopCap will pay off.
    Feb 2, 2012. 10:17 PM | Likes Like |Link to Comment