Riccitiello: NCAA PS2 Pricing Too High, Wii & PS3 Trends Probed

Author: by Leigh Alexander, Staff

In the rest of EA's post-earnings conference call, CEO John Riccitiello and fellow execs touched on a plethora of major issues, saying the company "shot ourselves in the foot" on PlayStation 2 NCAA Football pricing, and commenting on the state of the Wii and PlayStation 3. Over the course of several wide-ranging questions, analysts probed the top EA execs about their results, and one of the first questions focused on the relatively staid performance from the EA Sports division in this quarter's results. EA Sports' Sluggish Growth? Riccitiello commented that "there’s a couple of different stories" within the EA Sports group, noting that Electronic Arts feels strongly about FIFA, which he feels is a "better product" and "highly innovative" this year. But he notes overall that in North America, EA's large sports offering is "not getting the growth this year we would have otherwise liked" - though it's comparing to an extremely strong prior calendar year. However, the EA exec points out that a larger portion of industry growth in North America ended up on Nintendo platform, commenting: "We under-represent ourselves on Nintendo [platforms], even though we’re the number one third party" – the company's market shares on Nintendo are lower than they are on Sony and Microsoft. Obviously, Riccitiello noted: "That has an impact." Finally, in this area, the exec admitted: "To a degree we shot ourselves in the foot" on PlayStation 2 pricing for NCAA Football. The game was priced at $49 in North America, a decision Riccitiello called "overconfident", suggesting that it should have been $39. EA's Ruminations On Wii, PS3? Following this specific question, a number of analysts asked questions about the relative strengths of the main hardware platforms. Responding to one about the PlayStation 3, Riccitiello stated: "We remain supremely confident that this is a three horse race," and that all three console hardware platforms are strong. Going on to discuss how the market is growing, the EA exec agreed: "Nintendo is clearly getting a good chunk of the industry growth." Although he noted: "Lots of pundits would like to point out that, absent Nintendo, industry is down", he believes the argument is "a fallacy" and "a little bit circular". In addition, when asked about the attach rate of the PlayStation 3 possibly lagging, Riccitiello said that the longer-term would help show complete trends for the console, noting that "...we are now starting to see titles that demonstrate the power of this platform." He particularly singled out the upcoming, open-world Burnout Paradise as an EA-developed PlayStation 3 title to watch, suggesting that it's "...going to be a very highly rated and very successful title," and adding: "That kind of stuff is what drives attach rates, and unfortunately Sony hasn’t had enough of that until now." On Key Upcoming EA Titles Finally, the exec discussed some of the most important upcoming titles from the company and their timing, noting Spore is not scheduled to ship this fiscal year, as previously announced, but that "...it continues to progress well... we need to stand for quality." There is no information on possible release dates for The Sims 3 yet, but for Warhammer Online, it was noted it should arrive in the first half of the next fiscal year, and that Mythic was not part of the EA restructuring announced as part of the changes today - the exec said Electronic Arts would be "investing in the growth of that studio."