Giant publisher and developer Electronic Arts has had its shares downgraded by financial firm Citigroup to 'Hold' from 'Buy', following the announcement
of the NPD Group's November U.S. game sales figures, which showed overall disappointing software sales as the game market moved into a generational transition.
Although EA still garnered around 20% of the overall market for November, according to NPD, and its dollar revenue amount was actually increased from November 2004 by 8%, Citigroup suggested that EA's sales were still relatively disappointing, expecting growth of around 16%, and also cut its share price target to $60 from $65. EA shares promptly dropped just over a dollar to $54.10 in mid-day trading.
Nonetheless, EA's results were significantly better than Take-Two's 63% drop over last year's GTA
-inflated results for November, and THQ's disappointing 32% drop compared to November 2004, meaning that many of these game stocks may be in for a rough ride over the next few weeks and months.
However, one game maker initially bucked the trend, as Activision's shares jumped, up 89 cents to $14.47, thanks to titles such as Xbox 360 game Call Of Duty 2
and a 54 percent increase in sales in November 2005 compared to the previous year.