Sims 3 sells 3.7 million as EA reports mixed financials

Deferred revenue costs force third-party publisher to report $234 million loss despite increase in sales; latest life-sim nears quadruple-platinum stats, EA Sports Active sales top 1.8 million.

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The Sims 3 was EA's sugar daddy last quarter.

Following Microsoft, Nintendo, Sony, Capcom, THQ, and Sega Sammy, Electronic Arts has reported its earnings for the quarter ending June 30. Like many of its rivals, the company reported a loss--a $234 million loss, to be exact, on $644 million in revenue. During the same period in 2008, the company reported a $95 million shortfall on $804 million in revenue. Its loss per share was $0.72, compared with a $0.30 loss per share the year prior.

In a post-earnings conference call, EA CEO John Riccitiello blamed the ongoing recession and "the impact of deferred revenue" for the deficit. His company revealed that, outside of generally accepted accounting principles (GAAP), its net loss was just $6 million, versus a net non-GAAP loss of $135 million from April-June 2008. Its non-GAAP revenues were $816 million, and its non-GAAP loss per share was just $0.02, up from a $0.42 loss per share during the year prior.

EA's loss came despite the company declaring itself the top third-party publisher during the April-June quarter. The company singled out Fight Night Round 4, EA Sports Active, and The Sims 3 as its top earners, with the latter two games selling 1.8 million and 3.7 million worldwide, respectively. The NPD Group reported four of the top 10 US game SKUs in June were published by EA: EA Sports Active (Wii, 289,100 units), Tiger Woods PGA Tour 10 (Wii, 272,400), Fight Night Round 4 (Xbox 360, 260,800 units) and Fight Night Round 4 (PlayStation 3, 210,300 units.)

EA Sports Active now holds the distinction of being the best-selling Wii game ever published by EA, claiming a 21 percent share of the North American software market for the console. (In Europe, it claimed a 13 percent Wii market share.) The company has been aggressively going after the Wii market, going so far as to bundle Tiger Woods PGA Tour 10 and the far less popular Grand Slam Tennis with the Wii MotionPlus peripheral in the US and Europe, respectively. EA also released Boom Blox Bash Party, which has sold just over 70,000 units in the US as of June 30, according to NPD.

Looking ahead, EA is sticking to its full-year guidance of $3.7 billion to $3.85 billion in net revenue and a per-share loss of $0.85 and $1.35. Non-GAAP revenue is expected to be $4.3 billion, with per-share earnings of $1.00.

Discussion

72 comments
chuamishael
chuamishael

EA still owned in SIMS 3, Maxis developer group still earning, regardless of EA's report. Sales on Sims 3 is still at large. probably the largest among all the games this year. they even outsold Microsoft office 2007. The good thing about SIMS 3 is that there is no DRM, you can use it as much as you want. unlike spore.

modernwarfare3
modernwarfare3

EA's moto is challenge everything now is losing everything

andrew_ribbons
andrew_ribbons

I hope this means they've learnt their lesson, and will release Mass Effect 2 by BioWare, a game dear to my heart, DRM-less in the same way they did the Sims 3.

SicklySunStorm
SicklySunStorm

OK, so they reported a loss. Big whoop - so have probably 85% of the big companies out there across all industries. The main thing is EA are smart and clearly have the ability to ride out the storm, so this news doesn't even seem consequential to me... EA won't be disappearing any time soon

kavadias1981
kavadias1981

Almost every company seems to be in a financial no win situation.

djmiranda15
djmiranda15

@ athenian29 I don't consider paying 25-60€ a profit. Only a few games give more than what we pay for. Games that offer 200+ hours of entertainment are what I consider a profit. I don't care if other people pirate the game, I just want to enjoy what i have. And besides, what you pay for is so much better then what you download. Try it out. See for yourself.

vengeance00
vengeance00

also @ athenian29 DRM didn't work against piracy, it helped it because people who would of bought it didn't want the spyware on their pc and thus downloaded the DRM free crack. spore was pirated by 5 million compared to the 2.5million sold in the first few months it was out. as long as there are people with programming know-how no software will be piracy proof.

vengeance00
vengeance00

i'm wondering if they'll horseshoe in simcity through an expansion into this now that they can have a whole town loaded.

Ravenswan32
Ravenswan32

It's a clicking-based game, acessible to anyone, addictive, creative and personal. No wonder it sells so much, it's like a thousand games inside one, if you know how to play it.

wildamnesia
wildamnesia

The most addictive game on the planet. And for the most part, the gameplay is completely dull....and yet we are drawn to it like flies to a pile of poo.

-Celeste-
-Celeste-

@athenian29 Piracy does hurt companies in this economy, but consumers will lock down spending for things they dont see as having a justifiable value. People do not pirate software because they dont want to pay, they pirate software because they are either skeptical of the product or dont see it having that value. Companies charging 50-60$ for bugged / short / shovelware games. Companies charging 100-350$ for an operate system. Companies charging 500-2k for graphics software (i understand a lot of these aren't meant for normal consumers, but 500-1000$ for photoshop?). You think that by putting DRM on something people will just go out and buy it? Not unless you lock down EVERYTHING; even then, people will just find something else that either costs less or is shareware instead of buying your product. DRM may help prevent piracy, but it does nothing to boost sales or opinions of companies. Its not like spore would have sold double the amount if it wasn't available off a torrent. Companies need to realize that as prices go up, income goes down ,people are going to weigh want vs need a LOT more then before.

Nxss-effa-sim
Nxss-effa-sim

@ lamprey263 This will give you an idea of where all that money is going, it is actually pretty understandable. EA made $4.2 billion revenue last year. It cost them $2 billion to make that revenue (manufacturing and distribution costs). Which mean they have a $2 billion gross profit. Factor into that $1.3 billion in R&D, $1 billion for Selling (advertising) and Administrative, $400 million in Non-recurring items (if they took a loss on real estate or something), and other items of $50 million. Encompassing all of that and you stand roughly around an $800 million loss. Once you include Income Taxes it hits the Big b. But I have to admit the Non recurring items is rather large. I don't know what it includes unless I look at the official financial statements. R&D is also large. Anyways, what some people don't understand is that under GAAP just because you make revenue doesn't mean you literally taking in that money. A lot of revenue is based on Accounts Receivable which means people are promising to pay at a later date. That's why when you really want to understand the financial healthy of a company analysts look at Cash Flow--the amount of money on hand.

ldonyo
ldonyo

Who knew there were that many people unwilling to live their own lives?

PlyrX
PlyrX

Of course EA is going after Wii games, all they want is more money

TevoxZi
TevoxZi

I like the first Sims the most, but that's possibly because it was the first I played of them while it was still "new" to me. Now in my opinion; it's just getting more & more repetitive and isn't fun anymore. :/ But hey, this is just my opinion: Overall all the Sims are great! :)

Inconnux
Inconnux

not a big Sims fan, but to each their own... I just hope this sends a message to EA that a game will do well without the Securom Malware. If this had been a game that interested me (like mass effect 2 without Securom) I would have picked it up right away even though it is released by EA.

athenian29
athenian29

@djmiranda15 You could say that. Their games are certainly less popular with SecuROM oozing out of every pore. Or, one could make a case for MORE DRM in the industry. In this economic climate, piracy hurts more than ever - wouldn't you want to protect your profits?

djmiranda15
djmiranda15

After that big slap in the face, EA's not going to consider DRM for a while. And that's better for us gamers.

Geek12
Geek12

Very well Said jamyskis. I think Stardock/Ironclad games put it best. "Customers are not criminals".

jamyskis
jamyskis

Sims is an interesting enough game but it was the fact that it was EA's first PC title for a while without online activation that made it truly interesting. EA were quick enough to mention that Spore sold 1 million copies in the month of release - what they failed to mention was that sales bottomed out after that and that most shops were struggling to get rid of them. Worse still, my local GameStop and another games shop around here both reported they were having legal problems with selling the game, as customers were coming back and demanding refunds because they could not get the game to activate, usually parents whose kids have computers with no net connections (for safety reasons) and who didn't have a clue what they were getting into...Since then EA has not had a single game on PC that performed particularly well, despite critical acclaim for the games themselves - think Dead Space, for example. Is it then surprising that EA suffered deservedly horrendous losses, and is it a coincidence that EA's first booming success for a long time is their first DRM-free game?

Tornado_Volcano
Tornado_Volcano

I think that's obvious that the results would decrease. Not just EA, which produces excellent videogames , but all the others will present decrease in profit and, in most cases, even loss reports. I think that in Christmas, when NBA Live 10 and FIFA 10 come out, the EA's results will improve...

Makhdoom82
Makhdoom82

All good but i am getting a little tired here playing the game so when is the next expansion coming ? :)

Humorguy_basic
Humorguy_basic

@ dbzultimate3134, I think what he was trying to say was that many 'gamers' only play this game, and don't buy any other's. They are not real gamers because of this. If you have gamers that just play WoW, they are in the same camp. What keeps the game market going are those of us that will buy 6-12 games this year and don't just play one game all year!

evaneself
evaneself

Sims 3 has sold well because do not have DRM. Piracy was at this game before release with two weeks. So what? If EA don't put stupid activations and other craps. That I still yelled before. Better would fire managers because they are against clients. Stupid muckworms. By the way.. buy Mass Effect from EA Classics, don't have activation is cheap and very, very goood... dangerously close.

Humorguy_basic
Humorguy_basic

As consoles and hand-held's become more centre stage, so games have got dumber and dumber, this will mean they have to get cheaper and cheaper because of it. People are never going to pay $60 for a Bejewelled or World of Goo type casual game! This means revenue will continue to decline. A $20 game obviously has to sell more than 3 times the units to bring in the same income! 3.7 million units for Sims 3 doesn't bring in much income when the bulk of the sales are $30 expansions! You should never marry unit sales to income, because you never have all the information. For example, on PC GTA IV sold at least 2 million at full price, but about 3 months ago the price was reduced to £14.99 in all my local games stores. Now, let's say they sell another 2 million of the game at this lower price, making 4 million sales. It would be easy to think that that was 4 million at full price, unless you knew about the reduction. So when companies talk about unit sales, be a little more careful about assuming that's all full price sales!

lucebuce
lucebuce

i was reading this thing , and all i could think was '' We didn't start the fire, dum dum''

dbzultimate3134
dbzultimate3134

real gamers are people that play games, i dont think fake gamers buy this game, so i dont understand what your trying to say by real gamers dont buy this

Vojkan80001
Vojkan80001

I played few hours of sims 3 and to me it seems like sims 2.5

Manhasted
Manhasted

The majority of gamers are men. This game targets both men and women at the same ratio. So if you look at it that way then it's kind of obvious why the game sells

console-deity
console-deity

@Oozyrat real gamers don't want that kind of trash!

Blade8Aus
Blade8Aus

@Oozyrat yeah theyll probably make it for it but it wont be nearly as good....still sell ****loads though =/

onething77
onething77

I'm not a big Sims fan. I never understood why it became so popular. Is it me or its really boring?

gameking5000
gameking5000

EA revenues are bad but compared to other companies it's good. Also I'm not surprised Sims 3 sold well.

Diddies
Diddies

@Oozyrat Well lets say it sucks compared to the PC versions lol.

ColdfireTrilogy
ColdfireTrilogy

EA is aggressively throwing crap out the door and hoping that even if ignorant individuals don't buy the first 40 titles maybe #41 will be the magic lucky money maker! ......

JRD1912
JRD1912

God i hate the sims...Managing your sims is freaking tediouls, which turns the game into a make your dream home on a PC, which also SUCKS!

Oozyrat
Oozyrat

since the Sims 3 sold very well on the PC, why not bring it to consols. I loved the Sims 2 on the Xbox, and i would get the Sims 3 for the PC, but my com is starting to run low on space and I need a WAY better graphics card to start to even think of buying it. Plus, I think that a lot of people would buy it. (P.S - Please don't comment on this stating that the consol versions of the Sims 2 sucked. Me, my friends, and my bro all loved it, and that's all that matter to me.)

Pete5506
Pete5506

Good to see the game sold well

Vargasr
Vargasr

Make a medal of honor heroes 3 for PSP, this time with a longer campaign. This way together with the sims 3, you will start to gain money!

manutd4life0023
manutd4life0023

the problem with the sims 3 is there are some bugs in the game. patching the game will remove the bugs but people get difficulties to install the patch cauz of region problem. but the game is amazing. I hav played 1, 2, 3 and waiting for more

TXMostWanted
TXMostWanted

Good game...just waitin' on those expansion packs now...

Adam_the_Nerd
Adam_the_Nerd

Sims 3 felt unfinished, and this new item store is a complete ripoff. I didn't mind paying 30$ for an expansion jampacked with new stuff (example; Sims 2: Open For Business), but they just got lazy with this. I'm not paying a dime.

CVM_123
CVM_123

20 seems too little lol

kemar7856
kemar7856

now get ready for 20 expansions

cjasko94
cjasko94

I've never played a Sims game. Any one know if there any good? Course as its selling so much, but still. lmao.