Electronic Arts (EA) And The Demise Of The Video Game Industry
Chuck Jaffe of The MoneyLife Show interviews David Trainer about game manufacturer Electronic Arts, and the overall demise of the video game industry.
Summary: unlike other media outlets such as movies or books or even app platforms, the video game industry doesn't outsource it's ideas but needs to develop them organically. This is too comlex to be sustainable. The returns on capital are compressing drastically, with a decline from over 90% in 2004 to 2% today. This does not bode well for EA's stock price or the gaming industry as a whole.
David Trainer receives no compensation to write about any specific stock, sector, style or theme.
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Invesmentadvice
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10 years ago
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Member's comment
@WallStWolf hopefully the new PS4 and Xbox1 can help cushion the loss of 4th quarter earnings slightly.
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Wall St. Wolf
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10 years ago
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Member's comment
David, what is your view on EA's strategy for new games usually coming out at a $59.99 fixed price? Do you think raising the price could potentially increase EPS?
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