Electronics Arts(NASDAQ:EA) forecast dives in wake of CEO ouster - ZNGA, ATVI, 7974, SNE, MSFT, NVDA
Northern, WI 03/20/2013 (avauncer) - America’ s number two video game maker, Electronic Arts Inc (NASDAQ:EA) down by 8.34% to close at $17.15 dipped the highest in 19 months soon after it ousted its Chief Executive Officer and cut its lowered quarterly forecast even further. Its 8.3 percent drop has been its highest since September. John Riccitiello, the CEO will be leaving at the end of March. In a market that is shrinking steadily companies are adding new consoles that have no sure market and it is clear that the times ahead are going to be very challenging ones. While the company looks for a new CEO, Larry Probst the chairman will fill in the executive chairman post in the interim period.
Riccitiello’s run at Electronic Arts Inc (NASDAQ:EA) was a mixed one. He nurtured franchisees such as FIFA but expensive multiplayer launches such as “medal of Honor” and “Star Wars” fared very poorly. What marred his tenure further was also the fact that key executives left the company and included John Schappert, Chief Executive Officer who moved onto Zynga Inc (NASDAQ:ZNGA) down by 1.14% to close at $3.47. He has attributed his departure from Electronics Art to his accountability of his shortcomings in boosting the performance of the company. He also said that the task that any new CEO who takes his place will be no different from his and that the challenge will stay.
Customers are transitioning to online games that are played via smartphones and tablets and a complete new generation of consoles. In four out of the last five years, Electronics Arts posted net losses before extraordinary items. The company dropped its projected sales from $4.3 billion to $3.78 billion for the 2013 fiscal year. The demand for consoles is a very uncertain one. Activision Blizzard, Inc (NASDAQ:ATVI) down by 2.51% to close at $14.01 has been a little more lucky with the launch of its “call of Duty”. In November, Nintendo Co., Ltd (TYO:7974) up by 0.19% to close at $10,590.00 launched the WiiU and also ended up cutting its forecast for the fiscal year ending March by 27 percent.
The other contenders
Sony Corporation (NYSE:SNE) up by 2.14% to close at $17.17 new Playstation should be in the market by year end. Microsoft Corporation (NASDAQ:MSFT) up by 0.28% to close at $28.18 on the other hand has not made any announcement about any new Xbox launch. All these companies are in competition with those that provide mobile phone and tablet applications like “Shield”, the NVIDIA Corporation (NASDAQ:NVDA) down by 0.64% to close at $12.47 mobile console. Electronic Arts Inc (NASDAQ:EA) had betted on Sony’s Playstation too heavily and suffered losses in the last transition. The new CEO will have to de-focus from packaged titles and concentrate on profitability instead is what analysts aver.