EA's quarterly losses, annual income climb

The world's top third-party publisher lost $25 million during its most recent quarter but took in over $3 billion during the previous 12 months.

According to the research firm The NPD Group, January, February, and March were a collective boom time for the US game industry. Today, though, the biggest third-party publisher in the business reported an increased loss for the first quarter of 2007.

For the three months ending March 31, Electronic Arts posted a net loss of $25 million, up from the $16 million shortfall it suffered during the same period in 2006. The company took in $613 million in net revenue during the quarter, down 4 percent from the $641 million it took in during the same period in 2006. In a statement, EA said its increased loss was "primarily due to the transition to next generation systems." It also cited a onetime $24 million charge it incurred due to "after-tax stock-based compensation charges."

The Redwood City, California-based publisher had only a few major releases during the quarter. However, those that did sell sold well. The Sims 2: Seasons expansion pack topped more than 1 million copies worldwide, with Burnout Dominator and Def Jam Icon moving 500,000 units apiece. Though he didn't give sales figures, EA CFO Warren Jenson did say during an analyst conference call that Command & Conquer 3: Tiberium Wars was a "successful relaunch" of the series. According to NPD data, the game has sold more than 128,000 copies on the PC in the US; an Xbox 360 version was released today.

While $25 million is a princely sum to most companies, EA's quarterly loss was dwarfed by the publisher's annual revenues. For the 12 months ending on March 13, 2007, the company took in $3.09 billion in net revenue, 5 percent more than the $2.95 billion it posted during its prior fiscal year.

However, virtually all of the $1.88 billion in gross profit the company took in during the year was wiped out by expenses. The company spent $107 million on stock-based compensation charges during the year and went on a shopping spree that saw it acquire independent developer Mythic Entertainment, Headgate Studios, and Battlefield-maker Digital Illusions CE.

Unsurprisingly, EA's biggest game of the year was Madden NFL 07. As of the end of March, the game had sold more than 7.1 million copies on 11 platforms in the US, a 15 percent increase. As for what the rest of the world calls football, EA's lock on the FIFA soccer license translated into 13 million games sold internationally, including FIFA 07, FIFA Street 2, and 2006 FIFA World Cup. Overall, Jenson said that EA Sports' revenue was up more than 20 percent for the year.

EA's second-best-selling game during its last fiscal year was Need for Speed Carbon, which Jenson said sold more than 8.5 million copies internationally. That bested both The Sims 2 Pets, which sold 5.6 million during the year, and The Sims 2, which sold 3.9 million. However, it wasn't good enough to beat the whole Sims franchise, which moved a whopping 22 million titles during the year, according to Jenson.

Looking ahead, EA now predicts net revenue for its current fiscal year to be between $3.1 billion and $3.4 billion. Major titles set to launch during that period are Medal of Honor Airborne, Army of Two, Boogie, MySims, Battlefield: Bad Company, Skate, and the next Need for Speed and Madden titles. EA estimates that it will take in $300 million to $360 million during the current quarter, which ends June 30.

As of press time, EA stock was down more than 2.6 percent in after-hours trading, selling for $1.39 less than its $52.94 closing price.

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Discussion

85 comments
krasskommentz
krasskommentz

Personally...i hope Electronics Arts goes bankrupt. They treat their employees like garbage, and are a corporate behemoth. Nothing good comes from a MONOPOLY. [quote]LOL EA will continue to grow and consume, you cannot stop it millions will buy Madden, NBA live, Need for speed, you cannot stop EA soon they will have their own console and Millions will weep purchasing the new madded on their console named "TheOnly"[/quote]

generalvonngene
generalvonngene

[This message was deleted at the request of a moderator or administrator]

SeoTaijiFan
SeoTaijiFan

I understand the expansion packs to the sims like "Pets" or "Open For Business" (I have both of them plus University) but what's with the little "bonus" packs that give new clothes and stuff? that's stupid. They sell for close to the price as the actual games it's ridiculous and it seems like a new one is coming out every month. EA should stick to making quality expansion packs for the sims instead of stuff we can download off sims exchange or whatever. And what's with the game games they are making being like clones of each other? there's 8 million racing games, skater games etc. Think original.

andrew3000
andrew3000

They need to reduce prices on games like sims 2, cuz they sell the same game just with different names for the same price. RIP-OFF!

thebubbleprince
thebubbleprince

these **** delayed SPORE! *Sends prank emails to EA!*

Lord_Waffles
Lord_Waffles

I'd say good ridance, but than again, The SIMS! hahahah. They'd do alot better if they'd make more games instead of just making more football clones, and converting existing games people have already played onto EVERY system they can find. "Cell Phone Sims2" They profit BIG when games initially come out, they lose money(Time, credit, resources) when they keep converting the same thing.

rogermao
rogermao

I dont tihnkEA is very good, i prefer other companies

theKSMM
theKSMM

Three...billion...dollars. Wow.

kappareign
kappareign

ive never purchased an EA game... not because of their crappy business practices in the past - they just make **** games. gotta churn out a new game from a series every year whether its done or not, gotta make their money, not quality games

hale30
hale30

agree with matchlegacy man this game gets boring but try doin it with no cheats cause that is wut u probaly did and all thoses action games are really fun like battlefield 1942 and the Sims 2 for pc man there is 10 million more stuff u can do in that game

jamietje
jamietje

thats what you get ea for messing with CNC3!!

DeltaSpirit
DeltaSpirit

Who can they buy out to fix this? Anyway they should just go back to the time when people liked EA and they should make a few good games not just updates

MatchLegacy
MatchLegacy

Wow, what a bore. Gaming companies suck now. Nothing new. Ever. Who cares if EA's releasing more sims games? The game got old after the first 200 expansions released for it. Gimme a break. Carbon sucked. Sports games are overrated. Battlefield is overdone (and their servers are terrible). No one cares about linear action games like Medal of Honor and Call of Duty; they're boring and too limiting. Can't ANYONE out there make a GOOD GAME? Spore is delayed another year.

neonblueshadow
neonblueshadow

EA is the strongest publisher in the US. They're also the most profiting corp inthe US. This loss isn't all that bad for them and its very temporary, B/c switch to next gen consoles is a costly jump, you have to upgrade all your development systems, and testing systems, and all the new equipment is extremely expensive because they are new with high manufacturing costs. EA is also probably best placed for the next generation because they can afford to have all the equipment set up quickly, and work out the kinks quicker. This company is only going to get stronger in the near future ( Hellgate, Army of Two, and Spore, in addition to their usual soap opera franchises). Think before you bash them, and be real about it. Its not so easy to top these guys in marketing/ sheer publishing muscle and out of all the fluff they DO have several good games. ***edit*** Completely agree with mrarmagedon. Oh and I forgot to mention Crysis as an anticipated title.

ashuncc2
ashuncc2

Used game sales only count as revenue to the retailer that sold it. LinKuei_warrior i bought a used EA game...then returend it...does that count?

littlerism
littlerism

never seen the point in annual updates to be honest. dont see the point in forking out money for the same game as last year but with an 08 on it :P then again theers no accounting for taste :)

gtjava
gtjava

i just want my fifa 08

banodyne
banodyne

Never been a fan of EA's business practices so I'm having a moment of schadenfreude. (Love having a chance to use my favorite word.) Nothing against the games or the programmers. Just the suits.

rah_mhambrey
rah_mhambrey

again the ndp numbers do not include online sales for cnc3 so i can bet it has sold more than that......

Hillsy_
Hillsy_

@extremepleasure - Agree totally. But wait a minute, Road Rash on the 3DO you meant, right? The best version, or are we not in agreement. I think EA went down after the Amiga as most of there games now are unoriginal and boring. It is such an easy path to follow, bring out the next madden game with slightly better graphics and up-to-date player information and stats, then sell it to the public. The problem is, we buy it so EA release it. Don't we all decide on what we are going to buy? If there is a demand, EA will release it. The above games must be popular. Then again, look at The Sims 2, how many expansion packs are there now? it sells, why would EA not want to produce more. They are in it for the profit. Games as a whole are becoming more mass market. Look at how the PS3 and 360 are becoming one console...same games for each(in most cases)....A Pattern...

crusader8463
crusader8463

lol i just think its funny how much people hate EA. they are like the walmart of the video game industry. everyone hates them but everyone seems to keep buying there games :D sigh... maybe walmart and EA should become one company and be known as the worlds most hated/used company lol.

ssj4_2004
ssj4_2004

[This message was deleted at the request of the original poster]

Bronson2k3
Bronson2k3

All Pro 2k8 will eat away at there monopoly and Madden and EA will continue to lose$$$ :lol:

Sam_Lowery
Sam_Lowery

lol, I love how all the comments are things like "screw EA", "I hope they go out of business" and stuff like that. The best part is that they soured publics opinion against themselves by pumping their games full of product placement, treating their employees like garbage, and all the other shady business practices their into. They still have a long ways to go before their bankrupt, but I'm just stoked to see so many other people that hate EA as much as me :)

Limonadi
Limonadi

Im so excited! i wanna that ea buys GTA. so we dont see blood in games ever again.

Digz005
Digz005

LOL EA will continue to grow and consume, you cannot stop it millions will buy Madden, NBA live, Need for speed, you cannot stop EA soon they will have their own console and Millions will weep purchasing the new madded on their console named "TheOnly"

MorbiD_PiXie
MorbiD_PiXie

lol @ "and the next Need for Speed and Madden titles." Whats that gonna be ? "Need for Speed - Spoiler" or better yet "Need for Speed - RICE FOREVER"

beckoflight
beckoflight

YEAH ... go down EA who care !!! I'm glad go down with your sports games !!!!

Death_Masta187
Death_Masta187

You make crap you get crap.... The only news that would be better is "EA is closing their doors for good"

slayer1090
slayer1090

[This message was deleted at the request of the original poster]

slayer1090
slayer1090

[This message was deleted at the request of the original poster]

slayer1090
slayer1090

[This message was deleted at the request of the original poster]

slayer1090
slayer1090

I'm glad they lost money becuase EA has only been making half-ass games

Rickiej
Rickiej

I would'nt care less, Most of the games EA ships are crap.

n8berman
n8berman

Too bad for EA they can only release Madden once a year.

Khoo1992
Khoo1992

Making some cheap quality games and sell at a high price, still having loss, EA can go to hell!!!

smoothn00dle
smoothn00dle

I dislike EA, their generic games. Like Maya said: "Try to look for what people want and then try to make that game design". I call it Gay design concept *v*

360player_eq12
360player_eq12

i guess making about 20 of the same game for each system dosent hurt sales =/......

Brizen__Beez
Brizen__Beez

Reading this article basically makes me ashamed at how much revenue such a developer could make. It's freaking unbelievable. Really I have no comment except for admitting that I am part of those figures and should be ashamed of myself that they make so much money.

decoy1978
decoy1978

Cwagmire sums it up best. Those of us here on these forums are the minority. EA caters to everyone else. They'll buy the sports game regardless if its good or bad.

DoctorFu
DoctorFu

That NFL buyout didn't payoff too well for EA.

360player_eq12
360player_eq12

woot cant wait for need for speed 32, and madden 2080.

zsc4
zsc4

EA...I don't see what i can comment of them :?

ocdog45
ocdog45

wait till ncaa and madden comes out

mrarmagedon
mrarmagedon

*A day in the life of a gamer * OMG EA sucks their company is too Big and is all in it for the money I won't support them!! Oh wait a minutes I think I'll drive my Dodge to go get a cup of coffee from Starbucks. Then I think I'll go fill up at Mcdonalds. MMM that was good now I think I'll go to Walmart and buy some cheap crap. Wow that was fun I'm glad I'm a gamer who supports some businesses instead of huge ones like EA!

cwagmire
cwagmire

The majority of gamers are casual gamers and they buy sports games, games based off movies, etc. EA has a license for nearly every sport now so of course people will continue to buy them regardless if they are good or not. We, "hardcore gamers" who visit gaming sites frequently are in the minority. EA doesn't care about us really. They know their games are nothing special from the year before but as long as the casual gamers buy it, they'll keep making sub-par games. A sad trend really.

TurtlePerson2
TurtlePerson2

I think that EA will do better when some of their big franchises and anticipated titles such as MOH and Crysis come out. That said, I think that EA has to change their business model so that they don't alienate hard core gamers.