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Investor: the internet accurately predicts the console wars

Blake Snow

EA is the world's largest game maker. But that luxury comes at a cost of becoming more bureaucratic, more risk averse, and slower than most. In conservative fashion, the publisher placed early launch bets that the PS3 would be the most popular console. After all, its predecessor, the PS2, sold a bazillion units.

Roger Ehrenberg at Information Arbitrage opines on the game maker's current dilemma: "It has been fascinating to see the process of EA's coming to the realization that they got their bets dead wrong, and to see how they've adjusted strategy in the wake of new information (read: a Wii home-run and a PS3 disappointment)." He continues, "I'd say EA is now trying to manage risks after they have become reality, kind of like buying health insurance after you've been diagnosed with a terminal illness."

All told, Ehrenberg believes the collective internet accurately predicted the status quo of video games better than Wall Street; a reality where Wii currently sells like hot cakes, the PS3 not so much, with the 360 somewhere in between. "The internet conversation has been an incredibly good predictor of the actual outcomes for Nintendo, EA and Sony. While the game is certainly not over, it is pretty amazing to consider how directionally correct all of these online experts and users have been."

[via Game|Life]

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