EA posts $1 billion annual loss

[UPDATE] Madden publisher's earnings report shows huge fiscal year 2009 losses despite increased sales; Lord of the Rings: Conquest sells 1 million, Warhammer Online subscribers now 300,000.

It's been a rough year for the industry, but few companies have taken it on the chin like Electronic Arts. Today the publisher released its financial results for the fourth quarter and fiscal year ended March 31, showing that the company limped to the finish line in a year that saw it lose more than a billion dollars.

EA's financial results were almost as grisly as a good round of Left 4 Dead.

Net losses for the 12 months were just less than $1.01 billion, more than twice the previous year's $454 million in red ink. However, the publisher's sales were up for the year, with revenues jumping 15 percent year-over-year to $4.21 billion.

For the fourth quarter on its own, EA posted sales of $860 million, down nearly 24 percent from the previous fourth quarter's $1.13 billion haul. Those sales were led by Skate 2, Rock Band 2, The Lord of the Rings: Conquest, Left 4 Dead, and Need for Speed: Undercover. The good news for the publisher was that it has a net loss of only $42 million during the three-month stretch, compared with $94 million during the same period last year.

In a statement accompanying the release of the numbers, EA CEO John Riccitiello focused on the company's future instead of its rough recent past.

"EA's strong cost actions in Q4 FY09 together with our investments in our digital service businesses will set us up for a stronger FY10," Riccitiello said. "EA is well positioned with the right strategies in a growing industry."

Unfortunately, those strategies might take a while to turn things around. EA updated its fiscal 2010 guidance, saying that it expects revenues for the full year to be down to between $3.7 billion and $3.85 billion. It also expects to lose money in fiscal 2010, although not quite as much as in fiscal 2009. For the full year, EA is expecting losses between $274 million and $469 million.

Electronic Arts is holding its quarterly conference call with investors this afternoon. This story will be updated with details as appropriate.

[UPDATE] Highlights from the conference call are listed below:

--Pandemic's recent release The Lord of the Rings: Conquest has sold more than 1 million copies.

--The most recent info on Warhammer Online puts the game's dedicated player base at 300,000.

--Electronic Arts is currently working on a lineup of 30 games for Apple's iPhone.

--EA Sports Active is confirmed for release this month.

--Riccitiello said that he's confident that 10 EA Wii games to be released during the current fiscal year will be hits.

--The Sims 3 should be a major reason why EA Play division sales are expected to be up $300 million in the coming year. There will be downloadable content for the game on day one, as well as Apple Macintosh and iPhone versions.

--EA Sports revenues are expected to be flat for the year, whereas EA Games should be up on the strength of Mass Effect 2, Dragon Age, Army of Two: The 40th Day, and more.

--In a Q&A session during the call, EA executives acknowledged "softness" in the rhythm-game category that has caused them to lower their expectations for that part of their business.

--Riccitiello said that he doesn't think softness in the Wii market in Japan necessarily presages similar softness in North America. However, he does think that Asian trends such as subscription-based games are gaining considerable traction in the West.

--When asked about research and development spending for the next generation of consoles, Riccitiello said that he hasn't seen indications that a next generation needs to come anytime soon. He added that the current generation could definitely be an extended console generation because there isn't as much need for advancement now that gaming has entered the HD era.

--Riccitiello said that one of the company's problem games that suffered as a result of the economic downturn last year was Need for Speed. EA is confident that this year's Need for Speed, Madden, and FIFA games "feel very strong," He also pointed to EA Sports Active and Brutal Legend as potential breakout games.

270 Comments

  • SteveN GameSpot staff member

    Posted Aug 19, 2009 9:54 am PT

    EA became too big for its own britches.

  • JCTiggs

    Posted Jul 31, 2009 6:57 pm PT

    When the CEO/COO of your company doesn't even know what makes a good game you know you're in trouble. Yes, Mr. Lawrence Probst doesn't even PLAY video games. Let me repeat that. The person earning the most money at EA, the top dog, the one calling the shots, doesn't even play VIDEO GAMES! Unreal. The kicker...he's been there for over 25 years! lol.

  • RussianRAGE

    Posted Jun 4, 2009 6:24 pm PT

    JUSTICE HAS BEEN SERVED!

  • Stapleface10

    Posted Jun 3, 2009 3:18 pm PT

    for everyone game they make they make 1 bad one i love ea madden and yet this companty is going to screw them selves.

  • Feibie

    Posted May 16, 2009 11:49 pm PT

    *sigh* where's the passion man? this is why EA can never be Blizzard, and is why Blizzard is always ontop, disappointed in EA sometimes because they buy franchises i love and then the games don't live up to their names

  • costlywar

    Posted May 14, 2009 3:43 pm PT

    Lets think about this....1 BILLION DOLLARS! How do you lose that much? That is huge! I am willing to bet that the CEO has a nice bank account. I do not feel sorry for them. EA had good games, but then they got greedy. They hire developers who cut corners. Hmm, sounds like the the banks,auto industry,insurance co's,oil corporations, wall street. Ok, we won't go there..

  • itachi100

    Posted May 11, 2009 2:29 pm PT

    thats karma EA, deal with it

  • evaneself

    Posted May 11, 2009 1:40 pm PT

    "Inconnux Posted May 7, 2009 5:43 am GMT :
    It couldn't be because EA pissed off its main customers by treating them like criminals could it??? I know I have been avoiding EA games because of Securom. Perhaps now that they have dropped using idiotic DRM their sales will pick up?" .................. I want to say more of this... Like others, I don't buy anymore EA activations. I cry after Mirror's Edge and Dead Space, but what guaranty I have that my games will work after many years, when I want and where I want. I am nostalgic after good games and I have a great collection of games. Games, not activation cards, not useless dvd. It's a collection of SOFTWARE. Because of this is calling COLLECTOR'S EDITION, some of them, for COLLECTION. Long Live to Ubisoft and others.

  • Mickleohb

    Posted May 11, 2009 10:03 am PT

    I bet a ps3 port of L4D would help with those losses EA ;-)

  • Killer6b9

    Posted May 10, 2009 6:43 pm PT

    If the was to put a little bit more QUALITY into the games they make they may not be in this sinking ship......looking at MADDEN for one The Sims are no better. They have too many recycled games they just release over and over. EA is the biggest company that just rehashes the same time and time again. I want QUALITY over everything else. All the sports games should just be a download from year to year to update the rosters and to add any new features and that is a very simple thing to do.

  • brendanhunt1

    Posted May 10, 2009 2:41 pm PT

    next time, release the sims on the right date

  • yaddy1

    Posted May 10, 2009 5:32 am PT

    EA is not my favorite company but I don't want them to die! They fund Will Wright! (simcity, simearth, simlife, simect)

  • Will47

    Posted May 8, 2009 7:48 am PT

    EA is on to the biggest in gaming, it seams like they have a hand in every other game that comes out. What will this mean for the gameing industry when they go down?

  • magusat999

    Posted May 8, 2009 3:24 am PT

    The sad news is not that EA is having to bail water - but that if it goes down there are a lot of little EA-Peon companies going down with it. All those otherwise talented companies that are sucking EA's Buckwheat length underarm hair will sffer and in turn we will all suffer because those IP's all belong to an overgrown ogre who will probably sooner suffocate them with mogantic butt-cheeks than to give them their freedom WHEN and not IF EA goes down the tubes.

    You see, when the big fish that ate the little fish finally gets his - all that's left is little... well you know what happens to food after your finished digesting...

  • brendanhunt1

    Posted May 7, 2009 12:41 pm PT

    if you loss $1milliion u would know somthing wrong and sort it out, but $1billion come on

  • Fady117

    Posted May 7, 2009 5:45 am PT

    Yep, financial crisis hits all, and only some get out barely touched. As for me, EA can still make up for lost $$$, they got big hits and need to make sequels and some DLC and stuff. Besides, people won't buy copies as much during a crisis, so if they wait about 2 years and release hot new hits, they'll make billions of $$$ in a short time. Or at least that's what i think...

  • AnelZukic

    Posted May 7, 2009 3:47 am PT

    there aren't doing a good job in the last time, but still without them the gaming industry wouldn't be the same. They have great games but also some that sucks, but this year is looking better for them then the previous

  • AlexFili

    Posted May 7, 2009 2:48 am PT

    That's what happens when you have your fingers in too many pies All of the costs add up. EA should really do away with all of the average/mediocre games to leave all the nice shiny gems.

  • noclue_27

    Posted May 6, 2009 10:35 pm PT

    Haha, everyone seems to hate EA. XD

  • Inconnux

    Posted May 6, 2009 9:43 pm PT

    It couldn't be because EA pissed off its main customers by treating them like criminals could it??? I know I have been avoiding EA games because of Securom. Perhaps now that they have dropped using idiotic DRM their sales will pick up?

  • barJerubsheol

    Posted May 6, 2009 8:06 pm PT

    "EA executives acknowledged "softness" in the rhythm-game category that has caused them to lower their expectations for that part of their business. " only in the rythm-game category? Come now...let's be honest. Madden hasn't exactly raised anyone's expectations in 10 years. Over-milking IP's is EA's primary business. People just start to get tired of it.

  • destroyeur

    Posted May 6, 2009 7:41 pm PT

    1st - "There isn't as much need for advancement now that gaming has entered the HD era.", that is plain bs, neither the xbox360 nor the playstation 3 can generate a true 1080p on demanding games, it's 720p upscaled and it looks awful. Anyway EA isn't a developer of new tech, it's a publisher, and to say gaming just entered the HD era is to deny that computer was in HD for the last 10years, their arrogance isn't surprising.

    2nd - "The Sims 3 should be a major reason [...] There will be downloadable content for the game on day one", that's one reason they deserve to make less money, you just buy a game and there is already exclusive content on live, dlc is the new rip-off of this industry, they are in for the money not the creativity, soon they will release a shooter with nothing but one gun and one enemy and you'll have to buy everything else, even the damn credits, to get the full experience.

    Btw gamespot have to stop saying they lost money, they made less money than last year that's far from being bankrupt, it make gamespot looks unprofessional and non-objective.

  • green_dominator

    Posted May 6, 2009 2:39 pm PT

    EA should take a year off from releasing any full Sports titles, instead release DLC for them while they fix any problems or just try and make a better game, Quit killing perfectly good ideas and take a few risks, Everything is a risk, Life itself is a risk....
    Revisit EA history, make a new Strike game, How about Mutant League Hockey 2??? How about half a dozen other games in their classic arsenal they could be remaking instead of crap every year, At least NFS series is ok except the last few games....
    The loss of 1 billion dollars is small change for them, they can take it and learn but I doubt they will......

  • Gamingcucumber

    Posted May 6, 2009 2:32 pm PT

    Well if they had more talented developers that doesnt make factory made games they might see some more well deserved games. Look at it this way the C&C franchise has been a dissapointment ever since the shutdown of Westwood, they rush games like Army Of Two that had potential. They have these awesome looking games. The only bad thing is that they know it, so they rush it to the market as fast as they possibly can.

    Also how about bringing back the glory days of EA sports BIG?

  • dboe313

    Posted May 6, 2009 2:30 pm PT

    that wat they get putting out garbage sports games year after year they shoulda fixed this long ago thats rights karmas a b*9(&(*

  • razorsedge820

    Posted May 6, 2009 1:55 pm PT

    Karma's a biatch.

  • enoslives7

    Posted May 6, 2009 1:28 pm PT

    EA put alot of money into WAR, but it just couldnt compete with WOW.........I cant believe people still shell out big bucks for the EA sports shovel-ware

  • snooker8th

    Posted May 6, 2009 1:03 pm PT

    "He added that the current generation could definitely be an extended console generation because there isn't as much need for advancement now that gaming has entered the HD era." Basically... they are going to keep bringing their sh@$@y looking xbox ports to ps3. Only game I thought was truly excellent was NHL'09

  • pandastew

    Posted May 6, 2009 12:31 pm PT

    EA should quickly just roll over and die. not changing their view on DRM and even pissing off people who buy their products is obviously stupid. I never liked their "I am gaming world's super power and I can do pretty much anything and it will set the trend for the rest of the gaming world." attitude they carry and forget who really matters...the customers.

  • KreepLX

    Posted May 6, 2009 11:55 am PT

    Why does a company that makes 4.5 billion a year end up 1 billion in the red? This has bad business written all over it. They release games with pay to unlock content (not liked by customers), they play politics with developers, and they waste big money on failed acquisitions. I think their corporate spending model has gone too far out of control. They are buying up companies that offer any sort of competition to increase their stock prices and encourage this kind of behavior corporate greed behavior... 22-Sep-08 PROBST LAWRENCE F III
    Director 130,684 Direct Option Exercise at $10.91 per share. $1,425,762
    22-Sep-08 PROBST LAWRENCE F III
    Director 75,000 Direct Automatic Sale at $42 - $42.86 per share. $3,182,0002
    I know that executives make great wealth with stock options but adding millions to your portfolio every quarter like this is absurd. Want to know where your money is going? Just lask Lawrence Probst, Warren Jenson, and John Schappert. They have no heart for their product and no soul for the industry. Bioware, Valve, and Westwood all had family type of environments but all is lost when the corporate fist mangled their spirit.

  • JackHoleFace00

    Posted May 6, 2009 10:31 am PT

    A few notes of my own:
    -Why wasn't L4D released for the PS3 again (same for Mass Effect 1 & 2)? Is MS really paying them more than enough to make up for this lost revenue? It wouldn't make up for the huge gap but it'd help.

    -"He added that the current generation could definitely be... extended... now that gaming has entered the HD era." ...except for Wii

    -New franchises are going to save EA because that's where the incremental revenue is. Games like Brutal Legend, not necessarily Need for Speed and Madden. They're also mistaken if they think hardcore games on the Wii like DeadSpace will save them (as the horrible sales of MadWorld proved)

    -Sadly, EA may be looking for more subscription based games. I just hope they're not the ones I want to play. But it's hard to look at Activision making $2 BILLION profit a year from WoW without lifting a finger and ignore it.

  • da1writer

    Posted May 6, 2009 10:19 am PT

    @ burns112233: Agreed, Dead Space and Mirror's Edge were my favorite games EA has released, yet not that many people bought the games!

  • burns112233

    Posted May 6, 2009 10:14 am PT

    Dead Space & Mirror's Edge are great games. It's sad that hardly anyone bought them. Most people complain about EA releasing crappy games and when EA releases good games no one buys them.

  • zeke74

    Posted May 6, 2009 10:03 am PT

    Apparently, its NOT in the Game!

  • kytomasi

    Posted May 6, 2009 9:38 am PT

    All i want is other NFL games............... Im so tired of the same water down crap. But if anything happens to EA's madden, i think that'll be the nail in the coffin for them.

  • xophaser

    Posted May 6, 2009 9:33 am PT

    Tom Harware is putting up rumor Apple is looking into buying EA.

    When you make 2-3 good games and expect that to carry the rest of the junks EA releases. This is corporation and a lot of people high up are not intouch with games or really cares. They probably hire people from WaMu and other buisness mangers who are not game experts or care. They will bring in sliming of the sheep soon to cut these driftwoods. Big overhead. Not like Capcom or small studio that hire people who likes games.

  • Storm_Marine

    Posted May 6, 2009 9:32 am PT

    I don't understand some of you guys. Is it really good news when the 2nd largest video game company in the world posts massive losses?

  • Patimo1

    Posted May 6, 2009 8:59 am PT

    How could LOTR Conquest sell 1 million copies, it was nowhere near as good as it should have been. That's the thing with a lot of EA games made by other developers, they get rushed and end up being criticised for being unfinished.

    They make some great games like Dead Space but don't give time to other games like LOTR Conquest and Mercs 2. They gave Valve time to make Left 4 Dead and that was great, so I wish they would be less focused on profits & repetitive games and more focused on great games, because they can make them.

  • sgt-hawkins

    Posted May 6, 2009 8:53 am PT

    yes the need to be innovative like the wii

advertisement

Related Content

Matches based on text similarity.

Hot Stories

Newsmakers

Featured Stories

Tags

ea

Submit News

Got tips? Send them in!

Related Game

Left 4 Dead Boxshot
Left 4 Dead

Game Stats

  • Rank:
    79 of 78,795
    (up by 7)
    PC Rank:
    30 of 12,639
    Highest Rank:
    1 in 2008
    Tracking:
    6,520 Track It»
    Wishlists:
    2,853 Wish It»
  • Users Now Playing:
    2,229
  • Top 5 User Tags:
    1. left 4 dead
    2. zombies
    3. valve
    4. fps
    5. l4d
  • Mature Rating Description

    Titles rated M (Mature) have content that may be suitable for persons ages 17 and older. Titles in this category may contain intense violence, blood and gore, sexual content and/or strong language. Learn more

Full Game Details »Close
Also on

Related Games

Recent News

See All News »

Site Blogs