I thought I would contribute to the discussion about bad gaming decisions from a financial point of view.



I work in financial publishing and I see quarterly and yearly reports all the time from many different companies. What I hope to illustrate is how BioWare's and, ultimately, EA's decisions have been affecting EA's bottom line.

Bioware is a juggernaut in gaming. They have been since the early ‘00s with Baldur’s Gate and Neverwinter. They grew even larger as they consistently released blockbuster games that were well written and focused for core groups of gamers. So EA, being a publishing juggernaut with games like “The Sims,” “Command & Conquer,” and their sports games line-up, it seemed like a great decision to acquire the BioWare brand, as it's a studio that has always performed well in the market.

However, EA has never had a game that was truly conceived from the beginning with good writing. Their prior games were conceived with the gaming concept of “wouldn’t it be cool if we made a game that did this?” type. This model is fundamentally contrary to BioWare’s model and success. So when EA swallowed up BioWare, there was a lot of fan concern about this. And rightly so because BioWare’s fans aren’t stupid (not that I’m calling fans of “The Sims” or “Battlefield” stupid...), because they have learned how to read and think in order to experience BioWare’s products.

So after the acquisition, EA and BioWare top execs who survived the acquisition came out and assured BioWare’s fanbase that it will be business as usual. Unfortunately, that didn’t last long. Why? EA is about mass appeal to the casual audience. So to go for this new audience with BioWare’s products, they had to “dumb down” their products to appeal to these masses. Not only that, but EA also likes meeting deadlines, and BioWare’s ability to postpone deadlines in favor of completing and fleshing out a game was seriously hampered when the final say is up to an EA exec, likely one who isn’t even a gamer or fan of BioWare products.

Now when it comes to the financial community, you don’t find many stupid people. Those types of people tend get themselves fired quickly. So when investors and analysts read bad press, listen to conference calls, and such concerning mistakes or successes by EA when pushing out their products, EA’s stock price reflects these falters or wins.

So the chart below is a generation of the last year from March 15, ’11 to March 15, ’12 for EA’s stock price. If you look at the peaks and valleys, you will notice that this coincides with either quarterly reports, and/or the bad and good press.

July 26, 2011 – Conference call with CEO said that earnings for the later year will depend on SWTOR subscriptions.

August 11, 2011 – EA acquires a social media company.

September 20, 2011 – EA announces SWTOR release day for December 20.

October 3, 2011 – It was leaked that EA’s social media company has acquired millions of new players.

Anyways, SWTOR was released and the stock has been on the decline since, except with the small spike after EA announced their 1.5 million subscribers for it. SWTOR reportedly costs over $150 million. Many think it's double that. And as you can see, that last little spike and then dip is due to the announcement of 3.5 million copies of Mass Effect 3 sold and then the bad press about the ending of the game respectively. So EA/Bioware hasn't had a good year.



What do you guys think?





***Edit3: If anyone wants to link this, feel free. I haven't seen any articles that talk about anything similar to this. If there are, link them into the comments and I'll add them up here.



Edited for grammar. I'm not good at proofing my own writing.

Edit2 for the ADD comment.