Electronic Arts needs to be "more aggressive" in restructuring its business in order to achieve better results, following poor performance of a number of its key Christmas releases.
That's according to analyst Colin Sebastian at Lazard Capital Markets, who remains unimpressed by EA's plans to cut headcount and reduce the amount of products it releases next year.
"Time will tell whether these steps will effect better market performance, but we believe more aggressive restructuring is appropriate given that EA has yet to demonstrate meaningful franchise growth or operating efficiencies midway through the current console cycle," wrote Sebastian in his latest note to investors.
Sales of EA titles such as Mirror's Edge and Need for Speed: Undercover have failed to spark with consumers, prompting CEO John Riccitiello to tell investors that consumers have been reluctant to take a chance on new products.
"I would argue that in this particular year the consumer might have more reticent to take risk than they might otherwise be, in a very crowded Holiday," said Riccitiello.
Sebastian predicted that EA would move to cut jobs and games earlier in the week, with Lazard lowering estimates.
Again, the firm has reduced its expectations for Electronic Arts, dropping revenue estimates for the 2009 financial year to USD 4.6 billion and USD 0.68 per share, and 2010 guidance to USD 4.7 billion and USD 1.10 per share.