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EA falls on broker concerns about 'Star Wars'


cutXthroat

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Lol, I love how MMO gamers just mindlessly link market analysis with no background information.

 

1. Analysts have scorecards. Todd Mitchell has a very, very poor one.

 

2. Software has always done the same thing. Bloat at the beginning, inevitable drop because *gasp* some games aren't for everyone, then onto a plateau.

 

3. These exact same posts were made during Burning Crusade, Aion, Wrath of the Lich King and Cataclysm.

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what about this:

 

"Bigpoint CEO and MMO expert Heiko Hubertz argues that the game's subscription-driven model is unlikely to ever make it into the black"

 

Meaningless misinformation?

 

When the author calls the CEO of a major competitor an impartial observer, everything in the article loses meaning.

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That's entirely incorrect.

 

Companies like Countrywide were giving loans for $600k houses to people working on jobs that paid about $20k a year. The payments were affordable at the beginning, because nobody ever looked at the loan agreements.

 

There were demonstrably bad loans being made all the time. And there were companies specifically requesting that these bad loans be packaged into CDOs so they could bet against them by buying credit default swaps against them.

 

Read "House of Cards," about the collapse of Bear Stearns, and "The Big Short," about those investors who made billions betting against the housing market. Also, listen to the Planet Money podcast, and the episodes of This American Life about the financial crisis. And look around for information on a hedge fund called Magnetar.

 

-- If a loan was made out of fraud (which did happen) then it's fraud, illegal and everyone involved should be punished including the company that made the loan, the loan officer and the consumer.

 

-- There's nothing wrong with betting against the housing market or a company heavily invested in it.

 

-- If there was real fraud in what Magnetar did then they should be punished. But if all they did was take a position that worked out well for them than there is nothing wrong. Their standpoint is that they believed that investors were paying too much for the safe CDO tranches and too little for the risky tranches (which they owned). There's nothing wrong with trying to arbitrage that...

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what about this:

 

"Bigpoint CEO and MMO expert Heiko Hubertz argues that the game's subscription-driven model is unlikely to ever make it into the black"

 

Meaningless misinformation?

 

Yes,

 

Meaningful is the earnings call on Feb 1st. Speculation is just that.

 

This guy you linked makes free browser based games, he has a stake in saying that.

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This doesn't look like very good news, especially now that news media is reporting EA's stock is tumbling.

-------------------------------------------

 

 

The Old Republic cost EA $500 million, MMO a “risky bet,” claims analyst

“Risky” investment may define Riccitiello's time at the top, suggest market soothsayers

 

Tom Goulter, January 18, 2012, http://www.gamesradar.com

 

Speaking to Market Watch, analyst Doug Creutz estimates that Electronic Arts likely invested around $500 million dollars on Star Wars: The Old Republic, factoring in development costs and EA CEO John Riccitiello’s push to acquire the game’s developer, BioWare/Pandemic.

 

So let me get this straight, this analyst is including some random piece of the acquisition price of Bioware into the cost of development. No offense, but that sounds like a bit of made up math to me. How did they decide how much to factor in out of the 810 million dollar price tag of the developer? Further, how much has EA made on DA:O, DA2, ME2, etc.? Further, how can any article that calls Bobby Kotick an "impartial bystander" be taken seriously? I mean he's the CEO of Activision, the only Publisher bigger than EA, and the company that runs WOW.

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So let me get this straight, this analyst is including some random piece of the acquisition price of Bioware into the cost of development. No offense, but that sounds like a bit of made up math to me. How did they decide how much to factor in out of the 810 million dollar price tag of the developer? Further, how much has EA made on DA:O, DA2, ME2, etc.? Further, how can any article that calls Bobby Kotick an "impartial bystander" be taken seriously? I mean he's the CEO of Activision, the only Publisher bigger than EA, and the company that runs WOW.

 

Exactly!

 

That article is nothing but a troll at best. lol

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-- If a loan was made out of fraud (which did happen) then it's fraud, illegal and everyone involved should be punished including the company that made the loan, the loan officer and the consumer.

 

-- There's nothing wrong with betting against the housing market or a company heavily invested in it.

 

-- If there was real fraud in what Magnetar did then they should be punished. But if all they did was take a position that worked out well for them than there is nothing wrong. Their standpoint is that they believed that investors were paying too much for the safe CDO tranches and too little for the risky tranches (which they owned). There's nothing wrong with trying to arbitrage that...

There were lots of fraudulent loans, yes. Also, though, there were loans that weren't necessarily fraudulent, but insolvent nonetheless. Now, it's a lot harder to get a home loan, which is as it should be. But it had gotten to the point where everybody was doing it -- nothing illegal about it, but absolutely ridiculous and stupid anyway.

 

No, there's nothing inherently wrong about betting against the housing market, unless you're doing it at the same time as you're contributing to its failure.

 

If you're saying there's nothing wrong with what Magnetar did, then I know which side your bread is buttered on. They were requesting specific portfolios of crappy loans in CDOs for which they'd buy the equity, and then they'd take out lots of swaps on the high-rated tranches, knowing full well that they would all go down. Their statements on what they were doing are blatantly disingenuous. Nope, not illegal, so no punishment will happen -- CDOs and swaps were so lightly regulated, and complicated enough that few people really understood them, that Magnetar expertly gamed the system into lots of money. Well, and screwed over lots of other investors in the process. If you think there's nothing wrong with that, then you're part of the problem.

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"...casual observation of early play is causing us to rethink our churn assumptions," Mitchell wrote.

 

Anyone have any thoughts on this?

 

Borrowed from http://www.marketwatch.com/story/ea-falls-on-broker-concerns-about-star-wars-2012-01-19?link=MW_home_latest_news

 

Yes. It's very simple. "Casual observation" is not how you make multi-billion dollar decisions/predictions.forecasts. Were he in a fiduciary position to the people who might take his "advice," he'd be breaching his duties. This is a fluff article about a fluff opinion from a dude who just wanted to get his name in the press.

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Yes. It's very simple. "Casual observation" is not how you make multi-billion dollar decisions/predictions.forecasts. Were he in a fiduciary position to the people who might take his "advice," he'd be breaching his duties. This is a fluff article about a fluff opinion from a dude who just wanted to get his name in the press.

 

The guy has a 0.28 prediction rating.

 

On software specifically.

 

Hahaha.

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TBH none of this surprises me. The first few months of an MMO are the rockiest and also the ones that will make it or break it. If the MMO can pull through it's growing pains it will be a hit, if not, it will crash and burn like DCUO and APB did. Edited by WilV
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