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EA to lose $17m in profit from GAME’s Demise?
At a Wedbush investor conference last week, John Riccitiello, CEO of Electronic Arts, said:
Electronic Arts has 331.39 million shares in issue. If the impact on EA’s EPS is $0.05 (i.e. 5 cents), that implies a profit impact of $0.05 x 331.39 = $16.6m.
(To me, “mid single digit” impact means between $0.03 and $0.08, making the range of the impact between $9.9 and $26.5).
I don’t think that is the long term impact: once GAME is removed from the channel, EA will find new routes to market, and this impact is more from the unexpected speed with which GAME has come off the rails.
Yet losing $17m in profit (approx 3% of the guidance for EA’s profit in 2012) is not a negligible amount.