Electronic Arts beat both analyst expectations for revenue and profits today for the fourth quarter, driven by strong digital revenues and sales from its latest game, Mass Effect 3. But the company reported fewer than expected subscribers for Star Wars: The Old Republic, which had 1.3 million subscribers at the end of the year, falling short of analysts expectations, who were estimating that the company would report roughly 1.6 million subscribers for the online game. In response, the company’s stock was down more than 10 percent in after-hours trading to trade at $13.60 a share. The drop is especially harsh given that the company’s stock has fallen 20 percent over the past few months. As part of the financial release issued today, the company tried to paint a rosy picture of the company’s digital future. In the fiscal year 2012, it generated $1.2 billion in digital revenues, exceeding its goal of $1 billion this year, and representing a 47 percent increase year over year. In an interview, EA’s interim CFO Ken Barker said the company is forecasting digital revenues in fiscal 2013 of $1.7 billion, representing a growth rate of 40 percent. At those levels, he said digital will now comprise 40 percent of the company’s overall revenues, breaking away from its reliance on traditional packaged goods. Barker noted that in the past six months alone, FIFA 12 was able to break $100 million in digital revenues, a first for one of its packaged goods titles
Read MoreInternational News: Fest organizers say deals signed this year up 87%
Read MoreEven more social game consolidation is coming this year. And, here’s the reason why: There are hundreds of game companies competing on Facebook, and Zynga is single-handedly grabbing 15 percent of all the revenues. A report published by Digi-Capital , an investment bank focused on video games, says this year will be a strong one for consolidation based on the number of discussions it is having with investors and management teams. The bankers said the catalyst for the consolidation is either lack of revenues or profitability or both. The report said that Zynga, Wooga, King, Electronic Arts and Peak Games are all doing well, but as you get further down the list, many others are struggling to gain momentum. Meanwhile, the leaders in the space, and particularly Zynga, are constantly having to come up with new games to keep their user base engaged, which is good news for companies that have strong games or teams and are looking for a buyer. In the first quarter of 2012, Digi-Capital reports, 30 deals closed across all game sectors for a total value of $1.7 billion. In particular, casual, social, mobile and massively multiplayer online games were in demand. In 2011, a total of 113 games transactions took place, for a total value of $3.4 billion. Zynga, which recently spent $180 million to acquire OMGPOP, said it is looking to purchase more companies — and has deep pockets to do it. Besides the leading social games company, the report noted that other companies looking acquire or invest are from China and South Korea. They are specifically interested in social, mobile or other free-to-play games in domestic and international markets.
Read MoreIn the absence of any verified client budgets, talk about what’s in store for the coming upfront marketplace is highly speculative. That said, macro-economic trends seem to portend another robust sales period. In a note to clients, Janney Capital Markets analyst Tony Wible said he believed that ratings leaders CBS and Fox were poised to set the market, eyeing 10 percent CPM increases for both broadcasters. By Wible’s estimation, ABC is in position to command a 7.5 percent rate hike over 2011-12 pricing, while NBC is likely to write 6 percent increases. CBS has already indicated that it would look for double-digit rate increases. In late February, CBS Corp. CEO Les Moonves told investors that a reviving scatter market and strong demand would pave the way to pricing hikes of 10 percent or greater. Much of Wible’s enthusiasm stems from improving economic indicators and a stronger-than-anticipated automotive market. “The economic backdrop should help ad sellers,” Wible wrote in the report. “Consumer spending appears to be rising, and the auto market is poised to benefit from pent-up demand and the spike in fuel prices that may push sales of newer, more fuel-efficient, cars.” Wible added that while political spend typically goes to local media, election campaign dollars “should nonetheless increase demand for broader advertising and help sustain momentum in the scatter market that helps set the pricing benchmark for the new upfront.” As automotive accounts for 13 percent of all advertising revenue at the Big Five broadcast nets, analysts have seized on U.S. car sales data to support their upfront theses. Late last month, Moody’s Investors Service svp Neil Begley said domestic auto sales were on pace to grow 9.3 percent to around 14 million units, a spurt that should lead to record-high pricing in the upfront. While pricing is looking up, Wible wrote that he believed dollar volume would be a mixed bag across the broadcast slate, given the range of available GRPs in play. Through the first 28 weeks of the TV season, Fox is down 8 percent in the 18-49 demo, averaging a 3.2 rating, while CBS is up 3 percent with a 3.1. Thanks in large part to the Super Bowl, NBC is in third place with a 2.6 rating, up 8 percent versus the 2010-11 campaign, while ABC is flat with a 2.4. “Ironically, it may be the networks with the largest ratings declines that will see the largest CPM price increases,” Wible said in the report
Read MoreWhen you arrived at last night's Bravo upfront, a nylon tent with plastic windows in it had been erected around the front of the venue—one of those former Manhattan warehouse spaces way out on 22nd Street near 10th Avenue. The entrance was a big roller-shutter door, like a garage, and when you stepped inside the little box (another door a few feet away), colored LEDs and a really, really enthusiastic voice welcomed you to the Bravo upfront, where you'd be making over "your favorite Bravo-lebrities." Then the floor started to move, and you realized you were in a freight elevator. The NBCUniversal lifestyle network has a big programming slate this year. The network has green-lighted 11 new series with titles like LA Shrinks and Miss Advised and a show about yachting enthusiasts called Below Deck . There are also a pair of scripted series in development— 22 Birthdays , about misbehaving parents of kids at a tony private school, and Blowing Sunshine , set in a rehab center. According to data provided by SNL Kagan, the Bravo gravy train is continuing to chug along. The financial company predicted a small increase in subscription fees this year (21 cents a sub from 20 in 2011), an uptick in gross ad revenue ($439.5 million, up from $410.9) and an operating revenue increase of about $37 million
Read MoreTV News: 'Parks and Rec,' 'Portlandia" and 'Jeopardy' also on this year's list
Read MoreTV News: Organizers: All of the U.S. studios will attend this year
Read MoreWhen Disney acquired kid-centric virtual world Club Penguin in 2007 and social gaming company Playdom in 2010, many industry experts expected the company to use its intellectual property to grow those businesses. That hasn’t necessarily been the case. “The benefit to each of those companies in being owned by Disney is that you can take [Playdom’s expertise in social gaming and Club Penguin’s in kid-focused virtual worlds] and exploit that competitive advantage you already have by taking really great iconic brands and leveraging them. And they haven’t been able to do that yet,” said Wedbush analyst Michael Pachter. Pachter’s criticism isn’t lost on Disney. Last year, “we didn’t merge those two things particularly well together,” said svp of social games John Spinale, referring to Playdom and Disney content and character franchises. He added that he doesn’t expect the missed opportunity to be the story line for 2012, however. For roughly a year, Playdom has been developing Disney Animal Kingdom Explorers, a hidden-object game in the vein of Playdom’s top hit, Gardens of Time, which is based on Disney’s Animal Kingdom theme park in Orlando, Fla., and will debut on Facebook in early April. Coupled with Marvel: Avengers Alliance—launched earlier this month, but which Playdom had been developing preacquisition—Explorers makes for the second of three new Playdom titles this year to integrate with Disney brands. Rather than bringing Disney characters into Club Penguin, Disney has been more focused on cross-pollinating the virtual world’s brand throughout the company. Popular character Captain Rockhopper has been mingling with Disney World visitors alongside Mickey Mouse and Donald Duck for years, and more than 30 million Puffles (pets for users’ penguin avatars) were adopted last year. Paul Verna, senior analyst at eMarketer, said Disney has “clearly put a lot behind building [the Puffle] brand” but that it hasn’t captured the zeitgeist like, say, an Angry Birds. That app’s popularity gets at a larger struggle facing Club Penguin. Disney boasts that Club Penguin has more than 175 million registered players, up from more than 150 million. But as of December 2011, Club Penguin’s U.S
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