Game Company Financials Examined

An anonymous reader writes "An article over at Curmudgeon Gamer collects together and discusses the revenue reported over the past eight quarters for five game companies: Electronic Arts, Take Two Interactive, Activision, THQ, and Midway. Using graphs and some discussion, it reveals some interesting points and trends in the market. You can see how important Grand Theft Auto has been to Take Two, just how big EA really is compared to Activision, and whether the Xbox or GameCube is generating more revenue for these game companies." This is a very interesting attempt at collating and comparing revenue data for some of the bigger multi-platform game publishers.

Quantity versus quality

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Theres a few deeper reasons why the PS2 represents the larger market. The Sims might be the best selling game of all time, but all time implies a long time. Plus, expansion packs for it sell at a substantially lower cost. Thats not to say that the Sims and the PC market don't matter; the PC market is the second largest for EA.

But EA's real bread and butter is sports games. Sports games appeal to a wide audience that want to enjoy playing video games, but don't nessecarily have the time to learn and play a more original and involved game. People know the rules, and they can all sit on their couch and play with or against eachother. Their signature game Madden is practically a liscence to mint money by selling roster updates and bug fixes as sequals.

The other reason that PS2 gains on PC is lower costs. PC games still suffer from double packaging, and heavy promotional packaging considerations. Packaging on ps2 games, on the other hand, are smaller DVD cases. They weigh less, they use less material. And since the packaging is standard, economies of scale begin to appear. All you need to come up with is a cover slip design, a manual, and the game disc.

The nail in the coffin as to why PC games aren't doing well is their overenthusiasm for online gaming. The Sims online was a PC game and hasn't been doing nearly as well as executives had been predicting. I believe (but have not confirmed) that so far its been a net detriment to the PC side of EA.

The ps2 really is a large segment. Its also somewhat self fullfilling; when one sector owns a large enough portion of the market, developers start seeing less returns for porting games to other systems. The increasing lack of availablity and console exclusives beckons more gamers to the platform, causing a vicious circle.