• Hey, guest user. Hope you're enjoying NeoGAF! Have you considered registering for an account? Come join us and add your take to the daily discourse.

EA Posts Fiscal Q3 Net Loss of $641 million, Cuts 1100 Jobs, Closing 12 facilities

F

FrankT

Member
UPDATE 1-Electronic Arts net loss wider, cuts 1,100 jobs
Tue Feb 3, 2009 4:22pm EST Email | Print | Share| Reprints | Single Page[-] Text [+]
Market News

* Cutting 1,100 jobs, or 11 percent of workforce

* Will narrow its game portfolio and delay some games

NEW YORK, Feb 3 (Reuters) - Video game publisher Electronic Arts Inc (ERTS.O) posted weaker-than-expected results on Tuesday and said it would delay several games, causing it to forecast a loss for fiscal 2009.

EA, publisher of popular franchises such as "Need For Speed" and "Madden NFL," said its fiscal third-quarter net loss was $641 million, or $2.00 a share, compared with a loss of $33 million, or 10 cents a share, a year ago.

Excluding costs related to restructuring and other special items, it had a profit of 56 cents a share, far short of analysts' expectations of 88 cents a share, according to Reuters Estimates.

While experts expects the video game software industry to manage the recession better than others, companies like EA have been hurt by tighter inventory management at retailers which don't want to overstock their stores with titles that are not huge hits.

For example, where retailers may previously have pre-ordered 1 million copies of a new title like the latest "Lord of The Rings" title, they may now only order 400,000, and might slow to reorder additional copies, analysts said.

Revenue at EA, which goes head-to-head with Activision Blizzard Inc (ATVI.O) for the title of biggest publisher, was $1.65 billion, up from $1.50 billion.

Analysts had expected $1.9 billion, according to Reuters Estimates.

The company in December warned its fiscal 2009 profit and revenue will fall short of already-low forecasts due to disappointing holiday sales of its video games in North America and Europe. (Reporting by Franklin Paul; editing by Richard Chang) (Email: Franklin.Paul@thomsonreuters.com; +1 646 223 6195; Reuters Messaging: Franklin.Paul.reuters.com@reuters.net) (To read more about our Media news, visit out MediaFile blog online at blogs.reuters.com/mediafile
Click to expand...

http://www.reuters.com/article/marketsNews/idINN0353477520090203?rpc=44

Pulling up the numbers now. Delays on games as well it seems from what I'm reading Dragon Age now set for last half of 2009 and Sims 3 in June.

http://biz.yahoo.com/bw/090203/20090203006283.html?.v=1

http://biz.yahoo.com/bw/090203/20090203006246.html?.v=1

PLATFORM NET REVENUE MIX Q3 09 (Millions)
360 265
PS3 217
Wii 172
PS2 137
PC 119
DS 115
Wireless 48
PSP 35
Click to expand...

Platform Net Revenue Mix (as a % of Net Revenue)
360 16%
PS3 13%
Wii 11%
PS2 8%
PC 7%
DS 7%
Wireless 3%
PSP 2%
Click to expand...

Highlights


EA was the leading publisher in North America with approximately 20 percent segment share according to NPD. In Europe, EA was number two behind Nintendo with an estimated 16 percent segment share.

EA had 13 titles rated 80 or above in calendar 2008 – up from seven a year ago.

FIFA 09 was EA’s best selling title with 7.8 million copies and charted at number one across all platforms in Europe in the holiday quarter.

Rock Band was the number one title across all platforms in North America for calendar 2008, based on NPD data.

Need for Speed Undercover sold 5.2M copies. For fiscal year 2010, the Company will launch three separate versions of Need For Speed (NFS), NFS Shift for the PLAYSTATION®3 computer entertainment system and Xbox 360® video game and entertainment system, NFS Nitro for the Wii™ and Nintendo DS™ and NFS World Online for the PC.

LITTLEST PET SHOP sold 2.8 million copies on the Nintendo DS, Wii and PC. In the holiday quarter, it was a top-five title on the Nintendo DS in Europe and North America, based on NPD data.

Warhammer® Online: Age of Reckoning®, an MMO from EA’s Mythic Entertainment studio, ended the quarter with over 300K paying subscribers in North America and Europe.

EA’s digital direct-to-consumer revenue, which includes online and wireless, was $313 million year-to-date, up 27 percent year-over-year.
Pogo™ achieved an all-time high of 1.7M paying subscribers in the quarter.

EA Mobile™ is the world’s leading publisher of games for phones – with revenue of $50 million in the quarter – up 28 percent year-over-year.

The Company updated its fiscal year 2009 guidance and provided initial guidance for fiscal year 2010.
Click to expand...

http://biz.yahoo.com/bw/090203/20090203006591.html?.v=1

(Refiles to additional subscribers) (Updates to show stock reversing course)

NEW YORK, Feb 3 (Reuters) - Shares of Electronic Arts Inc (ERTS.O) rebounded nearly 5 percent to $16.26 after the bell on Tuesday after comments from the video game publisher's chief financial officer.

The CFO said it expects to develop about 20 percent fewer titles in fiscal 2010 from 2009. For details, see [ID:nWEN3761] (Reporting by Deepa Seetharaman)
Click to expand...

http://www.reuters.com/article/marketsNews/idINN0331661520090203?rpc=44
 
G

ghst

thanks for the laugh
Jtyettis said:
companies like EA have been hurt by tighter inventory management at retailers which don't want to overstock their stores with titles that are not huge hits.
Click to expand...

hey, way to be late to the steam party.

LiquidMetal14 said:
At least they have a heap of great games coming. Sales should recover a little this year.
Click to expand...

2008 was a stellar year for quality ea titles. best they've had in way over a decade.
 
A

Acosta

Member
A real shame, EA has a much more solid line that past years but they don't get the results they deserve. I hope Riccitello has time to put his strategies and that the rewards come in long term.

Still, they really need to watch what they do as a business, they dropped the ball with Need for Speed or Conquest, and these were some of their most safe bets. They can't allow themselves to produce great new IPs while they fail to deliver with the established IPs.

In any case, 2009 is the The Sims 3 year, so I'm pretty sure they will see better numbers.
 
Link

Link

The Autumn Wind
LiquidMetal14 said:
At least they have a heap of great games coming. Sales should recover a little this year.
Click to expand...
That's what a lot of people were saying before the fall.
 
J

JudgeN

Member
Ill go ahead and get this out of the way before Wii fans get here.


"They should made Wii games"

It a shame EA has become one of my favorite companies and now they can't sell the good games they putting out.
 
F

Frencherman

Member
JudgeN said:
Ill go ahead and get this out of the way before Wii fans get here.


"They should made Wii games"

It a shame EA has become one of my favorite companies and now they can't sell the good games they putting out.
Click to expand...

Well seems that their current Wii-Strategy had not worked that well....
 
M

Mooreberg

Member
At this point nobody will be able to bitch too much about EA playing it safe with predictable sequels. They tried the original and interesting route, and apparently they got smacked in the face for it.
 
D

Dyno

Member
This years earnings reflect previous year's strategies. These things are slow to move.

Let's hope they don't lose their vision. Dead Space save us, each and every one.

*chest thump*
 
diffusionx

diffusionx

Gold Member
Mooreberg said:
At this point nobody will be able to bitch too much about EA playing it safe with predictable sequels. They tried the original and interesting route, and apparently they got smacked in the face for it.
Click to expand...

Madden sold below expectations, and so did NFS. Their entire EA Sports lineup on Wii was a complete failure.

It's not just Mirror's Edge or whatever that brought them down. Their core stuff didn't do them any favors, and Warhammer which probably cost them an ungodly amount of money is already turning into a ghost town.
 
D

dork

Banned
they released the subscription numbers for war

i still love the game, but i can see it dying soon i guess

they need to fix end game and balance some servers
 
T

Tideas

Banned
what's the subscription for WAR?

Good thing EA isn't a Japanese company, or they'd probably lose more money due to the Yen
 
R

Rhindle

Member
Mooreberg said:
At this point nobody will be able to bitch too much about EA playing it safe with predictable sequels. They tried the original and interesting route, and apparently they got smacked in the face for it.
Click to expand...
Recommendation for EA CEO:

1. Read GAF daily and collect winning strategies
2. Direct minions to do exact opposite
3. Profit
 
J

JudgeN

Member
diffusionx said:
Madden sold below expectations, and so did NFS. Their entire EA Sports lineup on Wii was a complete failure.

It's not just Mirror's Edge or whatever that brought them down. Their core stuff didn't do them any favors, and Warhammer which probably cost them an ungodly amount of money is already turning into a ghost town.
Click to expand...

Madden sold below expectation? Madden Wii bombed because it was called "All play" Wii owners don't want All play bullshit they want real madden. Also they should put dead space/ME on Wii due to its ever so fast rising userbase, there is a huge untapped market there or so I hear.


This is what a Wii forum poster feels like, it tingles

O snap at the Wireless made more money then PSP :lol
 
Link

Link

The Autumn Wind
JudgeN said:
Madden sold below expectation? Madden Wii bombed because it was called "All play" Wii owners don't want All play bullshit they want real madden. Also they should put dead space/ME on Wii due to its ever so fast rising userbase, there is a huge untapped market there or so I hear.


This is what a Wii forum poster feels like, it tingles
Click to expand...
It's sad that you're kidding, because that is what they should have done.
 
Link

Link

The Autumn Wind
How do you figure? There was barely any software competition on the Wii for the holidays.
 
M

MightyHedgehog

Member
Mooreberg said:
At this point nobody will be able to bitch too much about EA playing it safe with predictable sequels. They tried the original and interesting route, and apparently they got smacked in the face for it.
Click to expand...
Problem is, this is more to do with their own downward trending (seen well before now) thanks, in part, to their yearly churn of samey shit for the last few years (and definitely longer). Their recent move to support fresh IPs was a reaction to this trend and not some great management style of their release strategy prior. The shitstorm hurts everyone, but these big guys are going to take the brunt, at least from a pure numbers standpoint. What matters is whether they'll stay the course on original releases or simply fall back into their old ways.

I don't see any big publisher outside of Ninty escaping the shitstorm. Really, EA and Acti-Blizz are simply too large and needy for operating revenue to last (as they are currently) if it gets any worse (and it probably will). And the thing that really sucks is that they've sucked up so much great original IP (only to do nothing or nothing worthy with it) as well as a great deal of talented mouths to feed who will now starve a bit thanks to the ultimately unsustainable business model of the megacorp video game publisher who buys everything and everyone up and relies almost entirely on expensive licenses. Man, it sucks for lots of people to lose work, but I hope that the industry is beaten back onto the more reasonable path of operation by the end of this current clusterfuck.
 
G

GhaleonEB

Member
EA, publisher of popular franchises such as "Need For Speed" and "Madden NFL," said its fiscal third-quarter net loss was $641 million, or $2.00 a share, compared with a loss of $33 million, or 10 cents a share, a year ago.
Click to expand...
Holy crap. That's one hell of a swing.
 
Haunted

Haunted

Member
:(

More microrapeactions and buyable cheats/money/108k keys incoming. Gotta keep those additional revenue streams up and running!


Here's hoping EA Partners isn't affected too badly, it's the only part of the company I give a fucking damn about.
 
Link

Link

The Autumn Wind
Tideas said:
WiiFit, Wii Play, Mario Kart Wii was its competition.
Click to expand...
And the millions of Wii owners that already had those titles that were looking for new software? Or the ones that want different types of games? Did you happen to see how much total software the Wii sold over the holidays?
 
T

titiklabingapat

Member
JudgeN said:
Ill go ahead and get this out of the way before Wii fans get here.


"They should made Wii games"

It a shame EA has become one of my favorite companies and now they can't sell the good games they putting out.
Click to expand...
It doesn't need to be said. The numbers speak for themselves.

Either way, you can't angle for the number one spot without pandering to the number one console.
 
Z

Zzoram

Member
Meier said:
Sims 3 to June is BRUTAL. My girlfriend was so excited it was potentially coming in a few weeks. :(
Click to expand...

This is a move that is difficult to understand. Don't cash-starved developers release games early to start bringing in revenue sooner? I always thought that delays were to polish and enhance the game at the expense of higher development costs.
 
V

viciouskillersquirrel

Member
JudgeN said:
Madden sold below expectation? Madden Wii bombed because it was called "All play" Wii owners don't want All play bullshit they want real madden. Also they should put dead space/ME on Wii due to its ever so fast rising userbase, there is a huge untapped market there or so I hear.


This is what a Wii forum poster feels like, it tingles

O snap at the Wireless made more money then PSP :lol
Click to expand...
Madden Wii sold badly because of confused marketing and brand dilution. At worst, the All Play brand is toxic and drives away the very customers EA is trying to win over, at best, it should have been a parallel brand to the normal Madden Wii.

Honestly, who is the target market for Madden All Play? Certainly not sports fans.

Also, only the crazier Wii owners specifically want Dead Space or Mirror's Edge on the Wii. They just want quality.
 
F

FrankT

Member
(Refiles to additional subscribers) (Updates to show stock reversing course)

NEW YORK, Feb 3 (Reuters) - Shares of Electronic Arts Inc (ERTS.O) rebounded nearly 5 percent to $16.26 after the bell on Tuesday after comments from the video game publisher's chief financial officer.

The CFO said it expects to develop about 20 percent fewer titles in fiscal 2010 from 2009. For details, see [ID:nWEN3761] (Reporting by Deepa Seetharaman)
Click to expand...

OH Shit

http://www.reuters.com/article/marketsNews/idINN0331661520090203?rpc=44
 
H

HylianTom

Banned
Wow. Poor EA. All of those nice, interesting titles and IPs, and this is the result?

To quote Spaceballs, "What a pity.."
/sarc

viciouskillersquirrel said:
Also, only the crazier Wii owners specifically want Dead Space or Mirror's Edge on the Wii. They just want quality.
Click to expand...

This.

Take a look at the Wii games list on EA's website. It's 90% shit, as opposed to the 50-60% lists for those other consoles.
 
K

Kintaro

Worships the porcelain goddess
Paging Jeff Green. You okay? =(

Bioware must be feeling some heat right now to really perform well. The MMO, Mass effect and Dragon Age are all big titles...
 
A

Acosta

Member
Zzoram said:
This is a move that is difficult to understand. Don't cash-starved developers release games early to start bringing in revenue sooner? I always thought that delays were to polish and enhance the game at the expense of higher development costs.
Click to expand...

It´s Jeff's fault.

In a more serious note, EA can't allow any mistake with The Sims, is their biggest game this year hands down, so I think they are ultra sensitive about having a polished product that attracts the attention of the userbase. Many fans are extremely comfortable with The Sims 2 as it is, they will need to give them good motivations to move.
 
Link

Link

The Autumn Wind
viciouskillersquirrel said:
Honestly, who is the target market for Madden All Play? Certainly not sports fans.
Click to expand...
Why, all the 6 year olds that make up the Wii's userbase, of course!

Also, only the crazier Wii owners specifically want Dead Space or Mirror's Edge on the Wii. They just want quality.
Click to expand...
In case there's any confusion, I'm not saying those games should have been on the Wii exclusively, but Wii versions could have brought in some decent extra sales.
 
M

Mooreberg

Member
MightyHedgehog said:
Problem is, this is more to do with their own downward trending (seen well before now) thanks, in part, to their yearly churn of samey shit for the last few years (and definitely longer). Their recent move to support fresh IPs was a reaction to this trend and not some great management style of their release strategy prior. The shitstorm hurts everyone, but these big guys are going to take the brunt, at least from a pure numbers standpoint. What matters is whether they'll stay the course on original releases or simply fall back into their old ways.

I don't see any big publisher outside of Ninty escaping the shitstorm. Really, EA and Acti-Blizz are simply too large and needy for operating revenue to last (as they are currently) if it gets any worse (and it probably will). And the thing that really sucks is that they've sucked up so much great original IP (only to do nothing or nothing worthy with it) as well as a great deal of talented mouths to feed who will now starve a bit thanks to the ultimately unsustainable business model of the megacorp video game publisher who buys everything and everyone up and relies almost entirely on expensive licenses. Man, it sucks for lots of people to lose work, but I hope that the industry is beaten back onto the more reasonable path of operation by the end of this current clusterfuck.
Click to expand...

I agree but I think it does mean they fall back into their old ways, and I can't blame them for it. Activision played it as safe as humanly possible (more Guitar Hero, more Warcraft, more call of Duty) and it worked. I never really thought the release date timing of stuff like Mirror's Edge or Dead Space was brilliant to begin with. Plus there is not having Rock Band on Wii sooner, or not having something like Left 4 Dead out on PS3. Even at a 2:1 in favor of 360 it could have justified the port. Of course I'm not really sure how the EA/Valve relationship works with Valve owning all of their IP, maybe there isn't much incentive for EA to go that route.

As for sequelitis franchises winding down... didn't they just announce more Need for Speed games?
 
You must log in or register to reply here.

Similar threads

Koei Tecmo reports highest sales since 2009 thanks to mobile games, but intends to focus on console titles
Business
0
318
Thick Thighs Save Lives replied
EA posts 21% revenue growth
Sales-Age
17
1K
Fuz replied
Square Enix Announces Declining Financial Results; Planning Multiple New Games Including New IP
News Business Game Dev 2 3
107
7K
Labadal replied
  • Poll
SONY/SIE: The Balance Of Chasing Margins, Multiplat Expansion, And Maximizing The Console
Opinion Business Analysis 2 3
101
8K
vaibhavpisal replied
Did anyone else think that the Nintendo Wii was going to be the best selling console ever back then?
39
4K
Eddie-Griffin replied
Top Bottom