Top-line DeclinesRepeated revenue declines across consecutive periods indicate dependency on hit-driven release cadence. Persistent top-line erosion would pressure long-term growth, limit reinvestment capacity, and make earnings less predictable between major franchise launches.
Free Cash Flow VariabilityUneven FCF undermines the ability to consistently fund development, marketing, and shareholder returns. Volatile post-investment cash generation complicates capital allocation and increases the chance management must delay or cut strategic investments in weaker revenue periods.
Earnings VolatilityReliance on sporadic blockbuster releases creates lumpy earnings and ROE swings. This structural volatility hampers long-term forecasting, raises execution risk for sustaining franchises, and can lead to abrupt shifts in profitability absent consistent hit development.