In regards to the gaming industry, stocks are fluctuating quite a bit. Despite strong performance from the Switch, Nintendo is seeing their stocks lower every week. Capcom, who started the year with the mega-hit Monster Hunter: World saw a steep drop for no explained reason, as well. But there is one company who's stocks currently only rising and rising, and that's Electronic Arts. Since March of this year, EA is seen a slow, but steady uptick in their stocks, culminating in a sharp jump immediately after they purchased the studio Industrial Toys. Despite a relatively weak E3 showcase, the company has reached record highs in the stock market. Stockholders and investors appear to be pleased by the offerings of sports titles, the upcoming Battlefield V, Star Wars game, and Anthem. For comparison, here is the market worth of the following other game studios:

Activision Blizzard: $61.8 billion
Electronic Arts: $45.5 billion
Nintendo: $38.5 billion
Take-Two: $14.5 billion
Ubisoft: $13 billion
Bandai Namco: $8.8 billion

 

[Taleweaver]

Must've been all those lootboxes smh

Wall Street marketeer: okay: welcome to the stock market, video games division. I can get you shares in sony, Nintendo, ubisoft... You name it!
Speculant: phew... These sound awfully expensive. Hey... What's that shiny box with -50% on it?
Marketeer: that's EA. They hold a temporary promotion where you get half a share at -50% of the price of a normal share.
Speculant: EA...EA... That rings a bell somehow. Werent they in the news lately?
Marketeer: *straight faced* i believe so. Can't recall the details, though. Are you interested?
Speculant: one second...*checks smartphone real quick* oooh... They're that company making all these new and upcoming games. You've got yourself a deal!

*six months later*

Speculant: okay... I'd like to sell my EA stock
Marketeer: not a probl...oh, you've got the shortsale shares. Did you buy the 'instant-sale' dlc pack?
Speculant: the what?
Marketeer: you see, EA considers selling stock a feature nobody wanted, so they removed it from their stock options. If you really want to use this, you'll have to buy the option first.
Speculant: what? But...i just want what's normal for shares!
Marketeer: ah... That'll be the season pass share options.

 

[WhiteMaze]

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Sorry I really had to open up Photoshop for this one..

 

[InsaneNutter]

This does surprise me, however I suppose it shouldn't as EA have a licence to print money.

People are always going to keep buying slightly improved versions of Fifa and other EA games every year, happily paying for micro transactions.

 

[Bladexdsl]

a lot of stupid people must be buying their shitty micro transaction and loot box trash...A lot of IDIOTS

their actual games are absolute trash they just keep making the SAME sports games over and over. and they pretty much run every single franchise they own into the ground. latest victim : the sims

 

[CallmeBerto]

Makes senses. EA has been making the games people have wanted. You can cry on temp or reddit it wherever you want but unless you VOTE with your wallet none of that matters.

 

[Velorian]

Makes senses. EA has been making the games people have wanted. You can cry on temp or reddit it wherever you want but unless you VOTE with your wallet none of that matters.

The stock market has nothing to do with sales right now. When the stock market is artificially inflated it only gives the appearance of companies doing well. When a company buys their own stock the value increases because buying stock represents that a company must be doing well, supposedly. However, right now because of deregulation and stock buy backs there is no relation between sales and stock value. This means EA could be doing awful in the sales department and could also be losing a lot of money and still have a high stock value. Unfortunately, this also means they and the entire stock market are going to crash at some point in the near future.

 

[CallmeBerto]

The stock market has nothing to do with sales right now. When the stock market is artificially inflated it only gives the appearance of companies doing well. When a company buys their own stock the value increases because buying stock represents that a company must be doing well, supposedly. However, right now because of deregulation and stock buy backs there is no relation between sales and stock value. This means EA could be doing awful in the sales department and could also be losing a lot of money and still have a high stock value. Unfortunately, this also means they and the entire stock market are going to crash at some point in the near future.

While this is very true. You have to look at the fact that their stocks have been going up for the last 4 years. Could they be buying their shares? Sure but unlikely for 4 years.

Also if you look at their report here - http://investor.ea.com/releasedetail.cfm?ReleaseID=1055757

They are doing really well. A few downs here and there but mostly an increase in sales.

 

[Velorian]

Look at the graph, since 2014 it's been climbing all the way up until now. Are you telling us that they have been buying their own stocks for 4 years to artificially inflate their stocks? Hah of course you aren't.

EA has been doing incredibly well for years now. They could buy their own stocks to bump it up even more but lets not pretend that they are somehow faking or fronting. No, they are successful and the gaming community made them that way by buying what they have to offer.

Yes, I am telling you that is a possibility. It doesn't mean that all 4 years they did this. It could have peaked

While this is very true. You have to look at the fact that their stocks have been going up for the last 4 years. Could they be buying their shares? Sure but unlikely for 4 years.


They are doing really well. A few downs here and there but mostly an increase in sales.

Yeah, I didn't say they have been doing this for 4 years. They could have made actual profit for 3 years and had a substantive increase in stock, but the last thing a company wants is to lose investors, so if even if they did well for 3 years and started losing money in the 4th year they will buy back stocks to keep the value high or increase and not worry investors and have investors continue to buy. Investors are the real customers, if they stop investing the company fails.

 

[Deleted User]

Yes, I am telling you that is a possibility. It doesn't mean that all 4 years they did this. It could have peaked


Yeah, I didn't say they have been doing this for 4 years. They could have made actual profit for 3 years and had a substantive increase in stock, but the last thing a company wants is to lose investors, so if even if they did well for 3 years and started losing money in the 4th year they will buy back stocks to keep the value high or increase and not worry investors and have investors continue to buy. Investors are the real customers, if they stop investing the company fails.

Not only 'could they have made an actual profit', they did.

You are saying that they are afraid of losing investors and their plan of attack is to buy their own stock. Do you not realize how that doesn't make sense? Who do you think they buy those stocks from? That's right, investors. By buying stock from investors they are the cause for losing them. Nobody has ever kept investors by buying them out. If anything that makes it a very unattractive investing opportunity for those who seek out investments. If anything it makes every investor gladly sell their stock to EA for sky high prices, they will just wait a few months/years and buy all their shares back at vastly reduced prices. That's free money right there. Nobody wants to buy stock when it's peaking.

Another thing, stockholders are not the real customers. The real customers are the ones who buy their products and services. EA doesn't need more people buying shares from shareholders, that has next to no effect on their revenue. People buying what they have to offer makes up for the largest part of their revenue. That is how everybody else, including investors, gets paid.

 

[Velorian]

Not only 'could they have made an actual profit', they did.

You are saying that they are afraid of losing investors and their plan of attack is to buy their own stock. Do you not realize how that doesn't make sense? Who do you think they buy those stocks from? That's right, investors. By buying stock from investors they are the cause for losing them. Nobody has ever kept investors by buying them out. If anything that makes it a very unattractive investing opportunity for those who seek out investments. If anything it makes every investor gladly sell their stock to EA for sky high prices, they will just wait a few months/years and buy all their shares back at vastly reduced prices. That's free money right there. Nobody wants to buy stock when it's peaking.

Another thing, stockholders are not the real customers. The real customers are the ones who buy their products and services. EA doesn't need more people buying shares from shareholders, that has next to no effect on their revenue. People buying what they have to offer makes up for the largest part of their revenue. That is how everybody else, including investors, gets paid.

You don't understand how the stock market works. It not only makes sense, but it is exactly what many companies are doing right now. Just google stock buybacks.

 

[WhiteMaze]

Makes senses. EA has been making the games people have wanted. You can cry on temp or reddit it wherever you want but unless you VOTE with your wallet none of that matters.

Precisely why the last EA game i have bought was Battlefield 4.

Because if this continues, we will have to buy ammo through microtransactions, by the time Battlefield 5 hits the scene..

EA: What's that? You don't like paying for microtransactions? Have fun with your knife!

 

[Foxi4]

This isn't representative of how well the company is doing. Right now the stock market is artificially inflated because companies are buying there own stock to inflate their worth. I don't know if EA is doing this, but it's hard to imagine with all the issues they have been having that they are having a boom in revenue.

Precisely the opposite is true. A company that "buys its own stock" is attempting to bolster its own position, you don't want too much of your stock out there or you're risking hostile take-over - you always want a majority of your stock in trustworthy hands. A company in distress sells stock (short-term gain for long-term decrease in security), a company that's doing well buys it because it doesn't need external funds. The more stock you have the less dividends you have to pay out in the long term.