Analyst questions EA Partners deals

Yesterday some pretty big news came out of the EA camp, with announcements that both Epic Games and Grasshopper signing on to publish games with EA’s help. Add these two to the list of other heavy hitters like Harmonix, Valve, and more recently, id, and you have a really powerful group of game makers with some serious distribution power.
For gamers, this sounds like the best idea ever. But an analyst brings these deals into question, and has concerns for the investors.
Signal Hill analyst Todd Greenwald is "concerned to see how much top-line growth is coming from low-margin distribution deals out of EA Partners," according to Edge. 
"[EA Partners’ agreements] generate two things for EA: sales–so it helps the top-line–and cash. But the deals are low-margin," he says. "EA is trying to get its margins up to 20-25 percent, and these deals negatively impact that."
Greenwald says that EA needs to take on […]

Original post by mrdestructoid@gmail.com (Destructoid.com) and software by Elliott Back