Generation Gap Forces Electronic Arts' Hand

In the past, the move to a new generation of consoles has often been marked by declining software sales and rising costs at the publishing companies. And this console transition looks like it will be no different. This past holiday season -- the biggest time of year for the industry -- was a poor one in terms of sales, and each of the publishers is battling spiraling development costs for the new consoles.

EA has been particularly affected by the transition. The company has given disappointing earnings guidance in five straight quarterly reports and has preannounced earnings warnings twice in the last year.

Last month, the company cautioned investors that its holiday quarter and full-year results would be significantly below investors' expectations. In recent trading, shares of EA were off $1.83, or 3%, to $52.93.

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