But those cuts could pressure EA's revenue and its bottom line, analysts say. If EA sells 2 million copies of this year's NBA Live, for instance, it will have left $20 million on the table, noted McNealy.

That could translate into 5 cents a share on the company's bottom line, said Pachter.

Of course, not everyone is worried about Take-Two's challenge to EA. EA has been gaining market share in the sports genre over the past few years, fending off a number of competitors, said Jason Maxwell, who covers the video-game industry for TCW. Meanwhile, August sales figures indicate that both Madden and NFL 2K5 are doing well, he said.

"Everything else is conjecture," Maxwell said. Those analysts concerned that EA's going to lose sales due to Take-Two's strategy are "overstating the danger."

Meanwhile, some question how long Take-Two can offer its ESPN games at bargain-basement prices. In the company's just-completed fiscal third quarter, for instance, NFL 2K5 added $20.9 million to the company's revenue, helping it best the Street's sales expectations. But the title contributed little or nothing to the company's bottom line.

In addition, the major game publishers are battling for market share in preparation for the next generation of consoles, said Norm Conley, a portfolio manager for JAG Advisors and a contributor to TheStreet.com's sister site, RealMoney.com. The problem is they might be cutting prices just as their costs climb, as they begin to develop games for the new consoles.

"Over the long term, we question Take-Two's pricing strategy and wonder what share it can maintain, as it will likely move to higher price points on next-generation consoles," wrote Milne.

Even Conley thinks that EA will continue to meet Wall Street's expectations despite the ongoing price war. EA remains a "fabulous" company and a "master executer," he said.

Still, the pricing battle likely will take its toll on EA's shares and that of the entire industry for the near future, holding back any kind of growth in the company's price-to-earnings multiples, he said.

"It's hard to get an expanding multiple when you've got price competition hitting a big part of the software cycle," Conley said.

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