EA could cut franchises and jobs - analyst
DateTime:7/8/2009 5:21:12 PM

"While the video game industry continues to show some resilience in the face of a very challenging consumer environment, strength does not appear to be across the board, and we believe that several EA titles are underperforming expectations at retail," wrote Sebastian in a note to investors.

Sebastian did note that some EA franchises have sold "fairly well this quarter, including Dead Space, FIFA 09, and Left 4 Dead, helping to offset some of the weaker performing franchises", but he also expressed concern about the company's release schedule going forward, "due in part to greater uncertainly over the long-term potential of the Rock Band franchise and the EA Casual label"."Specifically, our checks indicate that sell-through trends of key holiday releases Need for Speed Undercover, Rock Band 2, and Mirror's Edge remain mixed, which may reflect some fatigue overall in the music and racing genres."We believe further cost and franchise reductions are likely," he added. "Importantly, we believe EA is continuing to review its cost structure and franchise base, and it is possible that management will announce further cuts in headcount and the development pipeline (including existing franchises) over the coming quarters."