In the world of corporate news, a lot of attention has been centered on Electronic Arts' recent plans to acquire Grand Theft Auto IP owners Take-Two Interactive. Deutsche Bank analyst Jeetil Patel had a couple of choice words to share regarding the matter, as well as his own analysis on the current financial state of EA. Read more about what Patel had to say in our full article.

It's no secret that Electronic Arts is the biggest third-party game publisher and it's almost a safe bet to invest on its stocks at any given time. However, one analyst says that the gaming giant may have cause to worry due to the under-performance of its EA Sports division. Titles like Madden NFL 08 (PC, Xbox 360, PS2, PS3, PSP, Nintendo Wii, and DS) and NCAA March Madness 2008 (Microsoft Xbox 360, Sony PlayStation 3) are taking some of the blame. Find out why when you read the full article.

Following the NPD Group's report for September, Deutsche Bank analyst Jeetil Patel believes that it may be the beginning of the end for Sony's PlayStation 2. According to the report, software sales for the console fell at a faster rate than was first seen last month.

Patel describes the PS2's decline as inevitable but it's unclear whether the decline (which came sooner than expected) was due to "consumer transition to next-gen software or weak spending patterns amongst the low-end consumer." This may be a wrench in the gears for Sony which plans to commit to the console's 10-year lifespan.

"Needless to say, with tougher comps ahead for PS2 software sales, we think that the PS2 may finally be on its way out of the industry for good" says Patel. Although software sales may be down it remains that the PS2 console continues to sell, and continues to be one of the most played consoles despite the presence of the next-gens.

The decline in software sales may be explained partially by the lack of backwards compatibility for the new PlayStation 3 consoles, which was once explained to also boost PS3 games by limiting the console to only play that format. Perhaps the backlash of the absence of backwards compatibility is that sales for PS2 games suffered.

Patel also observes the underperformance of two of Electronic Arts' franchises: NCAA 08 (PS3, Xbox 360, PS2) and Madden 08 (PC, Xbox 360, PS2, PS3, PSP, Nintendo Wii, and DS). He believes that - in the light of a very "competitive environment" with competition such as Activision, Ubisoft, Microsoft, Sony, and Nintendo during the holidays - EA may introduce a price cut in November if the games continue to underperform.

No, he's not the guy from Miami Vice. Don Johnson is the European Mergers and Acquisition chairman of Deutsche Bank and has recently been appointed as the new non-executive director of the SCi corporation.

He's a seasoned veteran of the corporate finance world. With 28 years of experience, he is regarded as one of the best in the industry, having managed the likes of the Salomon Brothers firm.  

"I am very pleased to welcome Don to the Board of SCi. His appointment further strengthens the independent non-executive element of the Board and his corporate finance experience will be invaluable as the Group continues to explore new opportunities for growth." says SCi Chairman Tim Ryan.

The appointment is effective immediately and has also made Johnson a member of SCi's Remuneration, Audit and Nomination Committees. SCi Entertainment has got Eidos for its publishing label, as well as several development studios, like 10 Interactive, Beautiful Game Studios and Pivotal Games.

To Deutsche Bank securities analyst Jeetil Patel, the sales of the Xbox 360 and PS3 are just flat out disappointing, and that in Sony's case a price cut is "critical" in order to stimulate the market. The analyst put all three consoles on the block in a recent interview and had surprising things to say about the "next-gen" consoles.

Jeetil Patel talked about the Xbox 360 and PS3 and their problem with lack of demand:

Next-gen hardware sell-through of 700K units in Feb-07 brought its total HW installed base to 8.0mn in the US, still 30% less than the prior cycle at 11.2mn units at equivalent stages. Xbox 360 (230K) and PS3 (130K) unit sales were below expectations of 250K-300K and 200K respectively. Retail checks reveal that ample supply exists, suggesting a demand problem for next-gen consoles.

Patel also spoke about the PS3: "PS3 consoles are available at retail but sales are lackluster. Its 130K units sold in February was less than Xbox 360 sales last year (160K) and even less than the original Xbox sales of 140K in Feb-2002."

Deutsche Bank was equally unimpressed with the Xbox 360, with Patel stating: "Particularly disappointing is Xbox 360 HW sales of 230K in February, which puts its installed base at 5mn or in-line to the original Xbox which was an unproven console and faced substantial competition from the PS2."

The Wii however, has a different problem. It seems that Nintendo is having a problem keeping up with demand: "With Wii shortages likely in the next 1-2 quarters (and potential PS3 re-allocations to Europe), we are concerned that next-gen sales could further disappoint."

Nintendo has taken the lion's share of the market recently. In fact, combining the sales of the DS with the sales of the Wii shows that Nintendo grabbed 54% of the market in February. Nintendo of America President Reggie Fils-Aime has reiterated that Nintendo is doing the best it can to alleviate shortages; "... there are hundreds of thousands of consumers still waiting to get their hands on the system so we continue to both ship more units to retail every week and work non-stop to build capacity," he said.

All told, it seems that the Wii could be dominating the market now, but a market leader has yet to emerge for this generation of consoles.

This comes in a bit awkward after our earlier report that a suggested retail price of US$ 60 for premium next-gen titles may not be sustainable. According to analyst Jeetil Patel of Deutsche Bank, they are questioning if the appetite of the consumers are strong enough to be able for publishers to make software sales. Patel added that they are giving the craze until April of this year.

With that said, retail store Best Buy announced that we will be seeing discounts for Wii and PS3 titles within this week. In case you haven't bought Call of Duty 3 and Ridge Racer 7 yet, this may be the best time to acquire them as both games will have a US$ 10 price slash. Wii titles Super Swing Golf and Need for Speed Carbon, likewise, will be dropped to just US$ 39.99 each.

News like this are oftentimes good but for early birds like us here, it kinds of leave a bitter taste in the mouth. A drop in prices so early feels like a system is not doing well or the games were overpriced to begin with. Oh well, what are we saying anyway? A price cut is a price cut. No need to discuss anything further.

Or so thinks analyst Jeetil Patel of Deutsche Bank (hey, there's a change - it ain't our old Wedbush Morgan standby). In other words, he thinks we may be looking forward to a price cut in video games. He points to Electronic Arts cutting the price of Madden, FIFA, and Tiger Woods to US$ 50.00 as a possible sign. "Either the industry is still in transition, or the $ 60 pricing is not sustainable."

Okay, whatever anyone's opinion of EA is, given the... news of last year, it's inarguable that they are (for better or worse) the dominant player in the industry. So the choice to cut the price of a next-gen game when the industry says that the $ 60.00 MSRP is needed to recoup dev costs might be... jarring for an economist. Take it away, Jeetil:

We believe the inability to sustain $ 60 into April suggests consumer appetite for premium priced titles is questionable. Note the reported reductions include Xbox 360 SKUs of the bellwether Madden game, as well as Tiger Woods & FIFA, the latter two being released this past quarter (all three cut from $ 60 to $ 50). Recall that EA also cut Xbox 360 prices in May-06 despite selling into price insensitive early adopters.

Translation: heck no, we (well, enough of us) won't pony up the dough, Patel thinks so, as he tells GameDaily BIZ. Okay, this doesn't mean to say that the industry will really accept fifty as the new sixty - but in the challenge to boost sales of video games, particularly for the recently-launched PS3, price-cutting supply-side theory might sound tempting.