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  • Expect Beat From EA On Battlefield 3 Sales [View article]
    The earnings call indeed called out the significance of the Origin digital distribution platform. Perhaps only I saw some significance in it, materially affecting the top and bottom lines...

    "Another big beneficiary of the Battlefield and Star Wars launches is Origin, our direct-to-consumer digital service, which serves as a window into our own platform. Origin has been busy setting and breaking its own records. We have surpassed $100 million of non-GAAP revenue since our launch in June of this year. The client is now installed on more than 9.3 million desktops, and within the quarter, Origin recorded a milestone, over 1 million daily unique users. In Q3, they established breakthrough partnerships with Warner Bros. Interactive, THQ and Capcom. Last month, we added Trion, Robot Entertainment and 9 other new partners."

    Source: EA 3Q Earnings Call
    Feb 2, 2012. 01:24 AM | Likes Like |Link to Comment
  • Expect Beat From EA On Battlefield 3 Sales [View article]
    Aside from the excellent and informative article, I'm curious about the relevance and impact of EA's Origin.

    I haven't followed EA nearly as closely as ATVI, but I've heard a lot of buzz about Origin, particularly with Trion and other publishers beginning to utilize the service, indicating a good potential for scaling and economies of scale. I assume that EA gets a small slice of this digital download channel revenue generation?
    Feb 1, 2012. 01:48 AM | Likes Like |Link to Comment
  • Expect Surprise From Activision's World Of Warcraft Numbers [View article]
    Historically, the stock is rather range-bound. Prior to the recent new high leading into earnings release for last quarter, the range was typically bound to 10.50 and just north of 13.50.

    There is a lot of momentum play in the stock around earnings. My observations is that the stock price typically rises into earnings announcements and then falls, facilitated by market makers playing options.

    Given this, I'm not sure if it is such as good idea to buy the day before the earnings announcement. But of course, historical record is no guarantee of future performance. So, to each his own.

    You can of course check and validate these observations yourself. Perhaps you'll find things I haven't observed from my knothole.
    Jan 24, 2012. 10:28 PM | 1 Like Like |Link to Comment
  • Expect Surprise From Activision's World Of Warcraft Numbers [View article]
    Upside potential is limited, downside potential with lots of unknowns is much larger.

    Blizzard has one of the most dedicated (and addicted) fanbases around, an enviable position, and one that gives Blizzard a great deal of leverage and strength against new entrants into the market.

    Nonetheless, there is no question that the competitive landscape is becoming tougher and more crowded, which invariably reduces pricing power across the industry and reduces potential for high margins to the degree that were enjoyed in the decade. The fact that Blizzard was willing to cannibalize and offer up Diablo III to WoW players for free to retain long-term retention should speak volumes about the changing marketplace.

    A key Activision-Blizzard strategy has been to create alternative revenue streams with digital in-game services and products. In the short term, this has been successful and has more than offset losses in subscriptions, but it still begs the question of whether it is a sustainable strategy if it is at the expense of subscriber growth, much less retention.

    Activision has lost a significant share of NA/EU subscribers since January 2011. The article itself categorizes these as high margin subscriptions.

    In all likelihood, the NA/EU subscriber loss has been staunched to a large degree over the last quarter, but millions of NA/EU players still have yet to return.
    Jan 20, 2012. 04:14 PM | 1 Like Like |Link to Comment