NEWS - Monday, July 26, 2004


Possible Price Cut In Europe

Electronic Arts’ report on market outlook following its first quarter results last week has indicated that while further price cuts to the Xbox and PS2 are unlikely in North America this year, new prices may be forthcoming in Europe. "We don’t necessarily expect another round of price reductions," EA chief financial officer Warren Jenson said in the company’s conference call, speaking about the US price point, "but one is possible." However, he seemed more positive about the idea of a European cut. "In Europe, it’s possible that a price reduction could happen prior to the holidays," he continued - echoing predictions from many European market watchers that this spring’s US price drops could well be repeated in Europe in early autumn. Jenson also delivered the company’s predictions for hardware and software growth throughout the year - suggesting that while the Xbox and GameCube will sell more strongly in North America, the PS2’s performance will be better in Europe, as will the overall growth of the software market. EA expects the PS2 to sell between 6.5 and 7.5 million units in North America during the year, while sales of between 7 and 8 million units are expected in Europe. This contrasts with the expectations for the Xbox (3m to 3.5m in North America, 1.5m to 2m in Europe) and GameCube (2.5m to 3m in North America, 1m to 1.5m in Europe). Software growth rates for North America show the Xbox market growing by 15 to 20 per cent, the Cube growing 10 to 15 per cent, and the PS2 lagging with growth of 8 to 12 per cent - while figures for Europe were not mentioned, Jenson did say that software growth rates in Europe are expected to "slightly outpace the comparable growth rates in North America." That European growth is outpacing American growth isn’t exactly a surprising revelation, given EA’s actual quarter one figures - which showed that while its European revenues grew by 49 per cent year on year, North American revenues grew only six per cent. At these rates of growth, it’s possible to see a scenario - albeit unlikely - where Europe, not North America, is EA’s biggest market by the beginning of fiscal 2006 - a major step down the line towards Europe being the largest game market overall, a stage which the continent is widely expected to reach within the coming years.
Source: http://www.eurogamer.net

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