Evening Reading: Microsoft Should Buy EA

It's been a rough week for Electronic Arts and its CEO John Riccitiello in particular. On Monday the company disclosed the bad financial numbers we already knew were coming by virtue of their recent heavy layoffs. It clearly has taken a toll on Riccitiello who only offered to investors that the turnaround is taking longer than expected. That much was pretty clear from the numbers.

With the hard numbers now out there response has been harsh. On Wednesday it boiled over in the indictment of Ricitiello by former EA executive Mitch Lasky. For its part EA held the line with head of corporate communications Jeff Brown responding "Mitch needs to try de-caf. It's never easy being turned down for a job...Since Mitch left EA, Apple invented the iPhone, Facebook evolved to include a gaming platform and EAMobile became the world leader." But make no mistake, there's blood in the water and Riccitiello faces mounting pressure to be removed.

In my opinion that would be a terrible mistake. I won't sit here and pretend to have some in-depth knowledge of how the man operates. From listening to his presentations and covering EA as a game company under his leadership, though, I do have a sense that as CEO's go he's one of those people at the top who actually gets video gaming. While the economy pressures large publishers to increasingly take an accounting-driven point of view to their business, I like the idea of having a guy at the helm of EA who at least sees their creative side.

That probably won't be good enough to save his job. But rather than send Riccitiello packing, I think he ought to get a new job: head of Microsoft's new EA Games division. Yep, you heard me and I know some of you are throwing your hands up in disgust but hear me out. There's a good chance that EA's predicament will result in their being bought by someone. The opportunity is just too great. And the setup couldn't work out any better for Microsoft.

For starters, the 2009 video game sales figures make it crystal clear that big third-party games have to be multiplatform. Exclusives will come from first-party developers. Microsoft's attempts to develop its Game Studios in-house have struggled at best. Buying EA gives them a proven turn-key large-scale operation. It also would deliver a body blow to rival Sony on the sports front. Even should the licenses go back on the open market having Madden, Live, NHL, and FIFA as first-party exclusives would be a powerful lineup (see the Dreamcast's struggle to compete even with the solid 2K titles). The table is even set for it to be a soft landing with popular Microsoft alums Peter Moore and John Schappert now in key positions at EA. And it wouldn't necessarily mean all EA games would be exclusive. This is the same Microsoft that duels Apple for OS share and then sells Mac versions of its Office software.

And there you have it. Now, today's news:

Enjoy the weekend!

From The Chatty
  • reply
    January 15, 2010 5:33 PM

    I just started to like EA again but if Microsoft buys them then say goodbye to another chunk of great PC games like Dragon Age.

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      January 15, 2010 5:34 PM

      why wouldn't MS keep making PC games?

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        January 15, 2010 5:36 PM

        Keep...?

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        January 15, 2010 5:37 PM

        Because they stopped making them themselves years ago. What was the last PC game Microsoft published? They fucking killed one of their best studios whose games sold millions of copies not that long ago (Ensemble) too. They are too focused on the 360 to give a shit about PC gaming.

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          January 15, 2010 6:03 PM

          Yeah. Microsoft taking over EA would be a living nightmare for all the people who prefer to game on the PC, including myself. I'd even rather see someone like Ubisoft taking over them. Or hopefully, maybe they'll just keep on trucking and manage to stabilize their situation.

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          January 15, 2010 8:12 PM

          Zero PC titles in development at MGS. They killed FASA, they killed ACES, they killed Ensemble, they forced Halo into an action-oriented XBox launch title.

          Microsoft Game Studios doesn't care about PC people.

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        January 15, 2010 5:40 PM

        Yes, because if Alan Wake is any indication, MS LOVES the pc and highly respects it as a platform.

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        January 15, 2010 5:47 PM

        Because they either shut down their their PC developers or have them go exclusive for the 360. There are exactly zero games for Windows being developed by a Microsoft published developer.

        Ensemble, FASA, ACES, MS Flight Simulator, all shut down, and companies like Remedy were made to go 360 exclusive with their game, same with Bungie before they split.

        Microsoft has most likely already sold most gamers an operating system, so it makes perfect sense that they'd also want to sell that same gamer an XBox 360 with which they'll also profit from license fees on every game sold and high margin accessories.

        It makes sense from their POV why they'd favor the 360 over Windows as a gaming platform.

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          January 15, 2010 5:54 PM

          Sheesh. I totally forgot about ACES and Flight Simulator

          This wikipedia entry for Microsoft Games Studios is depressing:

          Former in-house

          * ACES Game Studio: Microsoft Flight Simulator series, Combat Flight Simulator series and Microsoft Train Simulator series. Closed on January 23, 2009 in a process of ongoing job cuts due to Financial crisis of 2007–2010.[7][8][9]
          * Ensemble Studios: Age of Empires series, Age of Mythology, Halo Wars. Disbanded on January 29, 2009.
          * Carbonated Games: Developed for MSN Games and Windows Live Messenger. Disbanded on March 27, 2008.
          * Digital Anvil: Brute Force, Freelancer. Disbanded on January 31, 2006.
          * Hired Gun: Halo 2 for Windows Vista. Disbanded in October 2007.
          * FASA Studio: MechWarrior series. Disbanded on September 12, 2007.
          * Indie Built*: Amped series, Links series, Top Spin series. Sold off to Take-Two Interactive in October 2004, now disbanded.

          *previously Access Software

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            January 15, 2010 7:17 PM

            FU M$

            ....................../´¯/)
            ...................,/¯../
            ................../..../
            ............/´¯/'...'/´¯¯`·¸
            ........./'/.../..../......./¨¯\
            .......('(...´...´.... ¯~/'...')
            ........\.................'.../
            .........''...\.......... _.·´
            ...........\..............(
            .............\.............\....

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          January 15, 2010 7:22 PM

          There are PC titles in concept stages, that is all I can say for now :)

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            January 15, 2010 8:13 PM

            Cross fingers they get out there, I'd love to see this change

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            January 15, 2010 8:17 PM

            Yeah, but I imagine most of those concepts getting shot down at meetings resembling the business frogs from the Muppets.

            Hmmmm... NAAAAH!!

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            January 16, 2010 6:38 AM

            Here's to hoping they aren't all MMO's.

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        January 15, 2010 6:12 PM

        Think ... I dunno.... ENSEMBLE STUDIOS >:(

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        January 15, 2010 6:21 PM

        they could market to jaded old PC fuckers who pirate everything, or younger stupid kids who buy everything legit. man what a tough business decision.

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      January 15, 2010 5:36 PM

      [deleted]

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        January 15, 2010 5:36 PM

        I don't see the GTA4 DLC, do you?

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          January 15, 2010 5:48 PM

          So PC Gamers can piss and moan about having to pay for it?

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            January 15, 2010 5:49 PM

            Hey, it worked for Fallout 3.

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            January 15, 2010 6:03 PM

            Hey man, i'd gladly pay for them. They're pretty much like full fucking games. Every developer can't be Valve and release DLC for free.

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              January 15, 2010 6:06 PM

              It uses GFWL so it's not like it would be hard for them to get it up there and sell it. Wasn't GTA4 just updated with some Lost & Damned achievements? It seemed like it might happen, but that could have been a huge mistake / cocktease.

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                January 15, 2010 6:12 PM

                It might, did take about a year or so for GTA4 to get released.

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            January 15, 2010 6:16 PM

            I piss and moan about having to pay for most dlc because most dlc is no better than what mods provide for free. GTA dlc goes far beyond that, and i respect that it is something that is worth paying extra money for.

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        January 15, 2010 5:49 PM

        The closure of Ensemble would seem to indicate otherwise :/

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          January 15, 2010 6:25 PM

          I say they shut down Ensemble to fund things like 343 Industries.

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        January 15, 2010 5:52 PM

        not really. At least not as much as having more 360 games out there.

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        January 15, 2010 5:53 PM

        Then why didn't Mass Effect 1 come out on PC until after EA bought Bioware? It was rumored that MS *might* ship ME for PC. It wasn't until EA owned Bioware and the IP that it actually happened. With strings attached saying no PS3 sales it would appear.

        I would hate to see MS buy EA.

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          January 15, 2010 6:04 PM

          Excellent point, I forgot about that

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          January 15, 2010 7:11 PM

          ME1 PC was in testing at MS before EA bought Bioware

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        January 15, 2010 6:01 PM

        No. More PC games aren't going to push out more copies of Windows. More XBox 360 games means more people buying 360s, which means more money from license fees on every game sold, DLC, video sales, and accessory sales going into Microsoft's pocket.

        Its potentially a lot better than selling that same gamer a single OS license and calling it a day, yeah?

        Sure, you have a number of people that have dropped Windows for OS X or Linux and do their primary gaming on the 360, but that number of lost Windows sales isn't likely isn't enough to offset the amount brought in by the 360, at least not enough to matter since they still sell so many copies of Windows. Also, OS sales to the consumer don't mean nearly as much to Microsoft's bottom line than it does to enterprise.

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          January 15, 2010 6:14 PM

          yeah I am going to guess the majority of MS's Windows sales come from places like Dell and HP and company licenses for it. if a few PC gamers switch to OS X or Linux or whatever that's probably not a huge deal

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            January 15, 2010 6:16 PM

            Yet if they did buy EA and do a PC port for of a random game whatever reason, they'd still make it a Windows 7 exclusive, like they did with Halo 2 (lol) and tried to do with Alan Wake requiring Vista before that version went away indefinitely.

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              January 15, 2010 6:20 PM

              I don't even think they would go that far considering its been years since Microsoft made a Windows port of anything. Between that and shutting down all internal PC game development, I dunno, it kind of blows me away how openly hostile Microsoft is towards Windows as a gaming platform. Yeah it makes sense for them to push the 360, but this really is on another level.

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                January 15, 2010 6:22 PM

                also interesting to note, GFWL is kind of hostile to develop for

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                  January 15, 2010 7:05 PM

                  what? where do you get that idea

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                    January 15, 2010 7:20 PM

                    on the contrary I would say that on the whole, the platform is much more flexible than the 360, although it fails to offer exact API->API parity there is a LOT especially wrt multiplayer. Sure it sucks to have certification, but there are far fewer TCRs and the ones that are there are focused on LIVE security and stability. I could go on and on - I was on the inside and have worked with many of the titles that have shipped happily. Things have improved a lot since the Halo2 and Shadowrun days, and it will continue to get better.

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        January 15, 2010 6:13 PM

        Nope, MS is pretty anti-PC gaming for whatever reason - probably because the 360 is significantly more profitable as a closed platform with licensing fees, less piracy, live, marketplace, etc.

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        January 15, 2010 8:14 PM

        No. They don't. Contrary to popular opinion, they do not.

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      January 15, 2010 5:52 PM

      yeah it sucks that they didnt release Mass Effect on the PC...god that could have been so good

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        January 15, 2010 5:53 PM

        EA bought Bioware before Mass Effect was released, and EA published MEPC.

        Otherwise, I'm pretty sure it wouldn't have gone PC.

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          January 15, 2010 5:55 PM

          Yep. Mass Effect PC had nothing to do with Microsoft, it was Bioware and Demiurge.

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            January 15, 2010 6:04 PM

            Oops, I meant to say EA. Whenever I talk about Mass Effect PC I always think of Demiurge because they did the port. They weren't the publisher.

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        January 15, 2010 6:06 PM

        It also sucks that-- WHAT THE FUCK ARE YOU TALKING ABOUT?
        Microsoft had nothing to do with the PC port

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      January 15, 2010 6:08 PM

      Besides PC games, what would happen to Nintendo and Sony systems? Or would Microsoft see dollar signs and let EA publish games on rivals' systems?

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        January 15, 2010 6:11 PM

        Nintendo would be fine but Sony would probably be hurting at least a little from such a move. I can't imagine MS would ever publish for a competing console.

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          January 15, 2010 6:14 PM

          That's the part I have trouble with - I don't think it would be worth Microsoft's money to buy EA unless it continues publishing to multiple systems. Is there a console by console breakdown on where EA makes its money?

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            January 15, 2010 6:19 PM

            for this generation I am going to guess most of their sales are 360 and Wii with PS3 in third. you're probably right though, buying an entire multi-platform publisher might not be worth it for MS. they would certainly downsize the shit out of EA if they did buy them but securing properties like Madden, The Sims and so on could be worth it. Imagine if Madden was a 360 exclusive. that would be a huge deal.

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              January 15, 2010 6:24 PM

              Xbox 360: The only place to play MADDEN!

              Yeah, it's hard to say what would be beneficial for them, plus I really am too dumb to have a clue. On one hand they could continue making millions selling huge games like that on other systems that already have insane install bases like the Wii. Or they could force anyone who wants to play a game like that to buy their own console and thus sell them more of their exclusive games after increasing their base even more.

              Would Nintendo and Sony even allow a Microsoft published game on their console? I could see Nintendo not caring but Sony... I dunno. Seems weird to think about.

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                January 15, 2010 6:26 PM

                There are a few Rare games on the DS, so it's happened already. Not quite as big a deal as if they had Wii games though.

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                  January 15, 2010 6:27 PM

                  if MS had a handheld there wouldn't be any Rare DS games for sure. there's no advantage to publishing on another company's competing console. sure you make money from it but you also have to pay them licensing fees and such. it's way too conflict of interest-y.

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                    January 15, 2010 6:30 PM

                    Speaking of which, I find it amusing that Nintendo and MS have to pay DVD licensing fees to Sony.

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                      January 15, 2010 6:33 PM

                      Nintendo doesn't, since the Wii can't decode DVDs :P

                      but yeah that's still kind of amusing but it's a bit different since DVDs are a storage medium and not really directly competing. Sony is also a massive fucking company, something people seem to forget when they think MS could drive them out of business. Sony can certainly afford to take a loss for a console generation or two as well :(

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                        January 15, 2010 7:03 PM

                        I'm pretty sure Sony and Microsoft pay Microsoft for Windows, MS Office (mad $$$), Visual Studio, etc., too.

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                January 16, 2010 7:02 AM

                why not? nintendo gets their cut. i don't see why MS would want to release games for sony though

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                  January 16, 2010 7:04 AM

                  i don't think sony would say no if they wanted to. the 3 companies make money from the sales of games on their platforms right? like a licensing fee

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              January 15, 2010 6:25 PM

              If MS was willing to lose money for yet another console generation, they could probably force Sony out of the games industry with such a move.

              All of this is assuming that Nintendo doesn't re-enter the high-powered console race however.

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          January 15, 2010 6:19 PM

          I could see them on a 6 month delay or something, that way it seems like PS3 is perpetually behind the xbox in the game department. This also allows them to keep selling games to the people they can't convert. win/win

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        January 16, 2010 7:00 AM

        i would think that PC development would slowly taper off, nintendo stuff may stick around since it's not exactly prime competition for their console right now.

        PS3 is where it gets tricky. i would think they'd keep at it initially but i think it'd be dumb for them to invest in developing for the PS4.

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      January 15, 2010 6:19 PM

      [deleted]

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        January 15, 2010 6:20 PM

        Howso, look at what they did with Rare.

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          January 15, 2010 6:23 PM

          Rare is just a developer though. EA is a publisher and distributor and they own a number of development houses. they are set up to build games for multiple gaming platforms and they count on the revenue from all ports.

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            January 15, 2010 6:24 PM

            I think you guys are right, I'm not sure it would be a good move for MS or gamers overall if that happened.

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          January 15, 2010 6:37 PM

          What exactly did they do with Rare? Nothing they've done has been impressive and I'm fairly sure no one has talked about that Banjo game since it was released.

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          January 15, 2010 6:42 PM

          They never should have acquired Rare. They overpaid and Rare hasn't delivered any hits for Microsoft. It has been a borderline total waste. Also, as mikecyb says, Rare, as a single studio, does not equate to a complex giant like EA.

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        January 15, 2010 6:21 PM

        yeah this is how I feel. a first party publisher buying a third party publisher seems like a giant conflict of interest for the first party pub and they'd just have to downsize the shit out of EA, so they'd have to get an extremely good deal for it to be worth it for them.

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        January 15, 2010 8:30 PM

        Yeah, if they can buy a technology or a property and make it work as part of their own thing, that's fine, but generally....

        It's amazing Bungie survived.

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      January 15, 2010 6:24 PM

      I disagree with Garnett. I think buying a struggling EA and assuming all their liabilities would be one of the dumbest moves Microsoft could make. It would be an upfront cash drain, a money pit for years to come, and a management nightmare. There's no way to stich those two corporate cultures together. Only a hammer would work. EA may have a large library but very few of their franchises are healthy, growing, and worth acquiring. The trend over the next 5 years looks like it could be away from big budget, AAA games, something EA is still heavily geared around. Better to let them die, sift through the scraps, and bid on a few gems and talent.

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        January 15, 2010 6:35 PM

        I think the problem with EA is their constant rehashing and even when they come with a new franchise, it seems that franchise is playing it safe by being too overly simplistic or really just a rehash of something already out there (Dead Space->RE, Dante's->GoW). They got their start by making some really kickass, original games. Where is Road Rash or Syndicate or even doing something with the Ultima universe? Or don't rehash those games again but make new, original concept games like they did back then instead of relying on the 1,509 Sim's game/expansion and their sports lineup which grows more stale with each year that passes. Perhaps they also need innovation in their sports games, using a subscription model or a singular game that simply gets roster and other updates yearly. Bring Need for Speed back into focus and overall, focus on quality over quantity. Make a good game that has legs to sell for years instead of having to sell a new game each year and then pull the plug on last years servers. Just so many issues for a company so big with so much power and potential. They should be one of the leaders in innovation when it comes to gaming and gameplay, instead they just come off as playing it safe and hey here's that same game you played last year with shinier mud on the guy's jersey's.

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          January 15, 2010 8:22 PM

          You must not be familiar with EA in the last 2 years since John Riccitiello took over as CEO. He has pushed for new, innovantive IPs in the company, which we began to see in 2008 with titles like Dead Space, Mirror's Edge, Battleforge, Brutal Legend, Crysis, Spore, etc.

          This in stark contrast to Activision, run by Bobby Kotick, that has basically pumped out a series of sequels, like Guitar Hero and Call of Duty. Instead of using traditionally annual titles (sports games), he has pushed for all IPs to have annual releases. Milking to the maximum. And it has worked, Activision is now huge.

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            January 15, 2010 9:28 PM

            Good points, Act. is doing very, very well with their titles and damned if we aren't nearly up to GH10 and COD-what 8? 7?

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        January 16, 2010 6:57 AM

        money pit? cash drain? they'll be printing money with exclusives for their hardware. next generation of consoles even. huge reason to buy and xbox right there.

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      January 15, 2010 6:35 PM

      Shut it down, sell off the parts. Seriously, they've done so much damage to the industry, they just need to be torn up and sold in pieces.

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        January 15, 2010 8:17 PM

        Disagree. What they've done is massive overcorrection to both ends of the creative development spectrum: Lots of new IP that is yet unproven, and loads of rehashed bullshit that sells well but has little to no innovation.

        Ideally, getting them to lower their development costs (much like every other developer in this industry should be looking at) would be a wiser move.

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          January 15, 2010 8:52 PM

          The problem of lowering costs and reducing development time is a HUGE issue in the industry, as far as I understand. Compared to even the early 2000's, it takes a lot more people, money, and time to make a mainstream game. It's getting more and more difficult to create the kind of content that gamers want. It's why so many publishers take so few risks anymore.

          Ah well, at least the indie and casual games have been getting stronger in recent years.

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      January 15, 2010 6:37 PM

      i would rather see APPLE buy EA if not just for the lols

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      January 15, 2010 6:42 PM

      Microsoft buying EA would be a clusterfuck. There are many issues that would crop up that would definitely impact some franchises if MS decided to do platform exclusives. I hope it never happens.

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      January 15, 2010 7:40 PM

      [deleted]

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      January 15, 2010 8:06 PM

      Exactly. This cannot happen for the sake of PC gaming.

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        January 15, 2010 8:07 PM

        And, to be honest, it can't happen for the sake of consoles. If PC gaming truly digresses to just facebook apps, then what will there be to push innovation and console cycles?

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      January 15, 2010 8:34 PM

      While it would be a shame to not see Bioware pay attention to their PC versions anymore (or even release their games on the PC), I don't think I'd care if Sims and EA's various latte RTSes disappeared. The Sims was important for the PC because it is a good proof that you can sell lots of copies and be profitable on the PC even if you are a single player game, provided you do the right things technology wise, but that's been well established by now and other developers are taking advantage of it to make far more interesting games than the Sims, so.....

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      January 15, 2010 9:26 PM

      Whatever. Microsoft buying EA would mean they would get a few years of exclusives but then there would be a massive talent drain qho would form new studios, which will merg and form the current status quo. It doesn't buy MS anything to get EA.

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