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[sonycowboy]

http://www.thestreet.com/_googlen/stocks/troywolverton/10229882.html

Selected excerpts...

Q: How much did the sports battle with Take-Two affect your overall picture last year?

We clearly had -- and have -- a very strong sports position that came under attack last summer. I think what we did was exactly what we needed to do, and that was we defended our turf. At the end of the day, we came out tougher and stronger. And, Madden, in particular, and our overall sports business, our segment shares, were actually up for the year. And that's taking the competitive threat head-on.

Q: What are EA's investment priorities right now?

I think your best, close-in returns are always going to be where the market's already established. Our first priority: deliver great entertainment. Secondly, it's to be ready for the next generation. The critical thing for us is that we are ready with entertainment that utilizes that technology horsepower when those consoles emerge.

Q: Why is that so important?

I think that's what customers want. Transitions are where you really set the standard for the next several years of your business.

We just think it's the way you build a lead. If you look at our shares the last go-round in transition, our segment shares improved very dramatically by really being the leader. Making the necessary investments today, we'll be ready for this next generation of technology.

Q: But at least initially, aren't the games you put out for the new platforms essentially loss leaders, because there's not a big enough installed base of users?

I don't think you can look at it like that. You can say that, but look, this is about sustaining what will continue to be a very strong business, and we have to take a much longer-term perspective than how many Xbox 360 units are sold in the fourth quarter of this calendar year. This is about the next five years, not about the next two quarters

Q: When do you expect revenue from next-generation console games to start moving the needle for EA? When will they start to replace sales of PS2 games?

I'm just not ready to forecast that. But what I would say without being quite that specific is the PlayStation 2 is going to be around for a while. And people are going to continue to buy that entertainment. I can show you a chart on just how strong pricing has held up for the top 20 titles in the marketplace. And the reason why it's holding up that strongly is because of the quality of the entertainment. People still love the stuff.

And we're also sitting with both Xbox and PlayStation 2 at $149. I think the last go-round, at price points of $129 and below, 60% of the volume was sold. I don't know that we're going to see that exactly happen this time, but what I'd tell you is, there is a lot of life left in this current generation of equipment, and the numbers are a lot bigger. And when those two lines really cross over is all going to be dependent on how quickly the console manufacturers roll it out.

 

[monchi-kun]

We clearly had -- and have -- a very strong sports position that came under attack last summer. I think what we did was exactly what we needed to do, and that was we defended our turf. At the end of the day, we came out tougher and stronger. And, Madden, in particular, and our overall sports business, our segment shares, were actually up for the year. And that's taking the competitive threat head-on.

more like beheading the competition than taking it head on

EA spooked every major publisher this gen...i expect the rest of the top 5 to be more aggressive in eroding their market share in the coming gen.