Metareview - The Godfather (Xbox)

STOP WITH THE EA LOSSES CRAP. THEIR STOCK VALUE WENT DOWN, NOT THE CASH RESERVES OF THE COMPANY.

They lost development time on other projects and that is it. You could argue the $40 price tag may lose them money, but that remains unseen. They may actually make more money because demand will be higher at $40.

Please stop writing things that aren't true.

Cranky Cranky, kid im sure they know more than you do, so shhh take a nap

It's called "Opportunity Cost" - look it up...

I guess my waiting for their quarterly email with the $15 off coupon before picking this one up won't help any.

They may know more than me indeed, but they're linking to someone who knows less than any of us. About 7 other people called them on this yesterday when they first reported it.

And an opportunity cost cannot be calculated.

Opportunity Cost-The cost of doing an activity instead of doing something else - applied to the time involved in unproductive activities.

Now if we took the cost it was to pay the team working on Godfather for an extra 4 months, I highly doubt their salaries would equal $800 million. Nor would delaying their next project 4 months. Besides with EA, they'll probably be beginning on Catwoman 2 which will make no money.

If you actually read rather than troll, you would see the $800 million was from a 5% stock drop. And if you knew what stock was, you would know a stock value doesn't effect the company, just the investors. (Excluding treasury stock, which usually accounts for less than 5% of the entire issued stock)

My bachelor's is in business, I am neither a writer or journalist, but seeing something this obviously wrong needs to be commented on, especially when it continues the next day.

So go ahead and flame me for knowing how to read and posting something with knowledge.

Maybe they'll fix a majority of the bugs for the 360 version?

"And an opportunity cost cannot be calculated."

OK, so as a business student (so am I), you should know that this is categorically FALSE. Not only can opportunity cost be calculated, but it SHOULD be calculated as part of any cost/benefit analysis. Claiming you can't calculate potential profits and/or losses is a lazy person's way out. Now if you were to say that you can't calculate opportunity cost in a completely accurate fashion, that would be closer to the truth, albeit, still not correct.

"And if you knew what stock was, you would know a stock value doesn't effect the company, just the investors."

And if you knew that many of the investors in a company are usually the employees and principles of that company, that stock drop can have an impact on operations, especially if the company needs to sell company-held shares in order to secure capital to fund other projects.

Seriously, don't drop the Business knowledge unless you can back it up. I'm sure you went to a good school, and I don't know how long ago that was, but these are the typical mistakes people make when still _in_ school. I'd suggest reading up on some more current material.

puh_fifer knows just enough to spread misinformation. A drop in stock value definitly affects the company. EA, the company, includes its stock holders. The overall value of the company went down 5%. That has a very real affect on almost every aspect of the company.

This game epitomizes what the industry is today: million dollar games offering little in the way of innovation for the price they command from the end user. Good for EA, they made a big budget game that will undoubtedly make millions, thereby discouraging any small time shop or developer from attempting to make a low budget game because no publisher will give them the time of day. Awesome, I look forward to a 2006 and 2007 full of GTA clones and FPS re-do's. Aweseome.

OOOHH THAT LOOKS GOOD.....NOT!!!!!!!! ITS EA DOT BUY IT.

Hey Rob,
You have a very good point on calculating opportunity costs, and I should've rephrased. But my point is that it wasn't an $800 million opportunity cost, it was their stock. Thank you for correcting me, I was being hastey.

And while the employees and company may hold stock in EA and it can have a drastic impact on them (Layoffs, morale), EA (The corporation) probably doesn't own a large amount of its stock. So if the stock did dip $800 million yesterday it would only have a very small impact on their bottom line. Just as if EA's stock jumped $800 million today based on reviews of The Godfather coming up solid, they wouldn't really see much from that.

But thank you for calling me on my mistakes. Like I said yesterday, I only took one corporate finance and got a B-. (I was in a marketing and management option at PSU.)

So yes, in my frustration with stupid flamers I said some stupid things myself and I thank Rob for correcting me. I am just trying to see Joystiq be as good as it can be and report things accurately.

Oh, and I work at RadioShack where the stock has dropped about 20% since I started here last May. I see managers jumping ship and low morale because of store closings, so I understand just how much a stock price can affect a company. But the reality is stock has little (sometimes nothing) to do with the bottom line of a company.

First time blogger

As a gamer and a finance professional i wanted to chime in. The loss in equity value is critical to a company like EA since software companies are not very capital intensive. The stock value has a direct correlation to the value of the goodwill and intangibles on the balance sheet. If stock is doing well, brand can be valued strongly which helps the asset profile for a company. With large stock drops for a company like EA the brand question comes into question and with nothing tangilbe to liquidate the valuation of a company current and future assests changes drastically. This can have and impact in the financing arena as lenders may take a more conservative stance. Some of the outstanding loans and bond issues could have default clauses if the stock were to fall to a certain point. Does a loss of 800M in market cap affect EA a whole lot in the grand scheme? No, but to say its ho hum is very incorrect. I think this will lessen management's apptite for game release delays given the elasticity of the price of their stock. Which could turn into more rushed to market releases

NERD FIGHT!