advertisement

EA suffers $641 million Q4 loss, increases layoffs to 11%

By Tom Magrino, GameSpotPosted Feb 3, 2009 2:10 pm PT

Publisher posts disappointing holiday quarter, increases job cuts; game delays pull down full-year guidance to $4.2-$4.25 billion; Warhmmer OL subscribers drop to 300,000.

Electronic Arts may have had one of the most robust lineups of new intellectual property in 2008, but the publisher continues to struggle to turn a dime. Today, the Redwood City, California-based publisher announced third-quarter earnings for the all-important holiday period, and in the words of EA CEO John Riccitiello, the results were "a clear disappointment."

It sold 5.2 million copies, but EA still considers Need for Speed Undercover a bit of a lemon.

For the October-December quarter, EA posted total net revenues of $1.65 billion, up $151 million from the year-ago period. That figure is substantially tempered by EA's total losses for the period, which grew to a staggering $641 million compared to $33 million from the year prior. As noted by EA, the publisher was heavily weighed down by a goodwill impairment charge of $368 million related to its wireless business as well as a $244 million charge pertaining to deferred tax assets.

"Our holiday quarter came in below our expectations, and we have significantly reduced our financial outlook for fiscal 2009," said Riccitiello in a statement. "We delivered on game quality and innovation in calendar 2008, with 13 games rated 80 or above, more than any third-party publisher. We expect to build on this great-quality record in the year ahead while delivering more profitability."

EA also announced today that it plans to reduce head count beyond its previous 10 percent estimate. EA now expects to cut its workforce by 11 percent, or 1,100 employees, as well as close 12 facilities, "narrow its product portfolio," and eliminate certain other costs. The publisher has already enacted a number of these cuts, with such studios as Skate 2 and Need for Speed developer Black Box and Madden NFL office EA Tiburon both having confirmed layoffs in the past month.

As a result of the grim holiday quarter, EA said that it would once again be lowering its full fiscal-year outlook. For the year ending March 31, EA now expects to pull in between $4.2 billion and $4.25 billion in fiscal 2009, with a loss per share of between $3.29 and $3.56.

In news that would also impact the publisher's lowered forecast, EA said that it would be bumping a trio of games out of fiscal 2009. The Sims 3, which had previously been expected on February 20, is now expected to arrive on June 2. BioWare's Dragon Age: Origins, which had been penciled in for a PC launch before the end of March, is now slated for the back half of 2009. Finally, Godfather II will move beyond its announced February 24 date, though no updated release window was revealed.

Even with the unsettling performance, EA had a number of wins to tout during the quarter. Despite continued pressure by Activision Blizzard, EA claimed the title of top North American publisher for the quarter, capturing a 20 percent share of sales according to data provided by the NPD Group. The publisher also said that MTV Games and Harmonix's Rock Band (which EA distributes through its EA Partners program) was the best-selling cross-platform game in North America during calendar-year 2008, according to NPD.

The publisher's best-selling game for the quarter was the well-rated FIFA 09, which logged global sales of 7.8 million. Need for Speed Undercover was another top performer, selling 5.2 million copies worldwide. That figure is slightly off from Undercover's predecessor, ProStreet, which had sold 5.5 million units during the same period last year. The publisher also provided a disheartening update on EA Mythic's Warhammer Online, saying that the massively multiplayer online role-playing game's subscriber base has dwindled to 300,000 through the end of December. In October, the game boasted more than 750,000 registered users.

179 Comments

  • ljm69ljm

    Posted Jun 2, 2009 12:02 am PT

    What would we all do without FIFA, Need For Speed and The Sims!?

  • BallOBaseSimmer

    Posted Mar 13, 2009 7:19 pm PT

    I'm not surprised that they did their best work on their FIFA soccer line. It's by design that the product they picked to improve most concentrated on a global best selling sport rather than the usual domestic pastime titles that they neglect. But if this means that there will be less patch support for other games that were rushed, then consumers will stop buying new games and EA losses will continue. Fans will no longer settle for retail beta test releases. And you can't just blame the economy on bad games that don't work.

  • flawless_blade

    Posted Mar 6, 2009 9:29 pm PT

    THATS WHAT U GET FOR DELAYING THE SIMS AND DRAGON AGE!!!! MUAHAHAHAHAAH

  • harrykotiej

    Posted Mar 3, 2009 6:45 am PT

    You know what's stupid? They are launching The Sims 3 in the summer holidays! Do they expect us in Europe (where many counties have their own language), to, when we are going somewhere else, take our computers with us and then buy the game in a different language to play it? Well, my answer is: Nope. :S Now I hope the Mac version will actually launch the same year.

  • brendanhunt1

    Posted Feb 27, 2009 3:39 pm PT

    release the sims allready and you wont lose everthing

  • mariet

    Posted Feb 21, 2009 8:08 am PT

    The only reason that this company is still standing thanks to The Sims, that would be in the same circumstances as Midway: on the brink of bankruptcy.

  • black_ace3

    Posted Feb 10, 2009 8:33 pm PT

    EA is suffering retribution for using SecuROM in their games...

    I admit, I have quite a few games that have EA branded on the boxes, but I own no game made by EA or any of their studios.

    I feel no sympathy for them at all.

  • P90E21

    Posted Feb 10, 2009 11:52 am PT

    Just think of all the studio's that may come back into the light. I mean if you cut off so many I'm sure some will just go open there own studio and when times get good I bet EA will want to buy them. Oh and thank god they didn't get a hold of Take 2

  • sharpshooter188

    Posted Feb 6, 2009 12:41 pm PT

    Black was garbage. Its like they were trying to go for realism but then werent. They were looking at the guns the whole time and didnt try for variety. Not even a damn multiplayer which wouldve EASILY helped it out. EAs just a dumb company overall. I feel sry for the lower ends employed by it. They sponsor ridiculous ideas, or if it is somehow a good idea its poorly executed. I avoid anything with an EA tag on it anymore.

  • enoslives7

    Posted Feb 6, 2009 11:01 am PT

    "Black" was a good EA game, but their sports games are pure rehashed crap.

  • Kalundume

    Posted Feb 6, 2009 10:37 am PT

    It always makes me pleasure to hear that this game cartel company suffers some losses. Hail the economical crisis ! After they have wasted Ultima, Sim City and other franchises I eagerly wait a day when their managers are fired or finish like Madouff and the company is finally dead. I thank them for SecuROM as well. Unfortunately they have bought my favourite CRPG maker too, Bioware, lets hope it does not mean the end of this excellent developer !

  • YoJim8obaJoe

    Posted Feb 6, 2009 6:49 am PT

    Teach em for making 10 crap games for every good one,and making nothing but sequels that hardly ever add anything new,IE madden fifa and any other sports tripe they have rights for

  • saraphin

    Posted Feb 6, 2009 4:37 am PT

    EA is making the wrong move. They are raking in tons of cash and if anything, they should be diversifying, not cutting down. Look at history; keep people employed, hell, hire more. You got the brains and the balls to ride it out. Games are always gonna be bought; it's a huge industry. EA has to lead the pack, screw the fear mongers. Why was Dragon Age pushed back? Too scared to put it in stores? Cause you can't tell me that the Bioware guys didn't give you product. Did corporate say "lets release an RPG during Xmas?" Hmmm.

  • timeforme23

    Posted Feb 5, 2009 9:41 pm PT

    wth? i love ea! but with delays i hate it only but you have to addmitt it does sell some good games i am an ea lover who here is with me?!

  • tarantyno

    Posted Feb 5, 2009 9:37 pm PT

    People should stop bashing EA for not making each game perfect and give them some freakin credit! Or maybe most of you were bourne in the late nineties and dont remember how many coolness they brought to the gamers... Remember the first Medal Of Honor?...need 4 speed porsche?...and all the Fifa games back from more then a decade ago?....what about now? MIRRORS EDGE , DEAD SPACE, BATTLEFIELD BAD COMPANY, AND BURNOUT PARADISE (wich is also a FLAWLESS pc port too) ........ There cant be all good apples on a tree

  • Cody13_2012

    Posted Feb 5, 2009 8:23 pm PT

    Can't say I didn't see this coming. I'm glad this is happening because now EA is finally starting to release/make good games.

  • Desulated

    Posted Feb 5, 2009 8:14 pm PT

    EA is more on the quantity side over quality.

  • shamarke

    Posted Feb 5, 2009 3:33 pm PT

    undercover sucked, it hurts for EA

  • Chizaqui

    Posted Feb 5, 2009 10:33 am PT

    Down with the EA MACHINE!!! finally, a reprieve for all the buy ups that were ruining the industry

Need for Speed Undercover Quick Links

Summary | Reviews | News | Previews & Features | Images | Videos | Answers | Hints & Cheats | Forum | Check Prices

Check Prices: $38.99 – 39.99

GameStop $39.99 SHOP ›
Amazon.com $39.82 SHOP ›
Deep Discount.com $38.99 SHOP ›
advertisement
advertisement
Click Here

Images

  • Need for Speed Undercover Image 1
Need for Speed Undercover Boxshot Enlarge the boxshot
Need for Speed Undercover

Game Stats

Full Game Details »Close
Also on

Games you may like…

Users who looked at content for this game also looked at these games.

See More Similar Games
advertisement