According to a MarketWatch report, financial institution J.P. Morgan has downgraded shares of major publisher and developer Electronic Arts to 'neutral' from 'overweight'.
This is due to both concerns over harsh competition for the top EA games, as well as the looming possibility of further hardware shipment cuts such as those recently announced
In the note, J.P. Morgan analyst Dean Gianoukos explained his belief that shares of EA have already taken into account the possible next-gen growth shown by the company's slate of titles for Xbox 360, PlayStation 3, and Wii.
The company's upcoming catalog boasts a number of high profile releases, including Army of Two
for the Xbox 360, as well as the multiplatform Harry Potter and the Order of the Phoenix
summer movie tie-in. However, the analyst commented specifically that that EA faces "serious competitive threats" from other high profile multiplatform releases, such as Activision's Shrek The Third
and Spider-Man 3
, as well as Microsoft's Xbox 360-exclusive Halo 3
Nonetheless, EA does seem well primed competitively for the coming year, having posted record revenues
over the Christmas quarter of $1.281 billion, driven by a number of notable releases such as Need for Speed Carbon, FIFA 07, The Sims 2 Pets
and Madden Madden NFL 07
In addition, the company has also commented that it plans to throw more support behind Nintendo's platforms, including both the Wii and DS, noting in a recent conference call
that it aims to become the top third party publisher for both platforms.