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.

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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.
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.

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GHOLY

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ea is very rich and they will not die whit just 1 billion. they have some great games buy they must focus on bad games to make thim great too. nfs was very bad and next versions must be very better to save some money.

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BPrimeTimeL

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umm so is their profit -$1 billion? or just losses?

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shabulia

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I am confused. Does the 1.01 billion dollar loss reflect an actual loss in dollars over the last year or is it a comparisson of revenue that was actually generated between this last fiscal year during the economic downturn (2008) and the year before when things were better for the economy (2007)?

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danchambos

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HOW DID THAT LORD OF THE RINGS GAME SELL SO GOOD! THE DEMO WAS CRAP!

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MrFinalFantasy

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wow. 1 billion. now that's alot of money. will EA cope?

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df-1

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Limited installs/DRM is NOT ok.

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lucky13jesse

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Left 4 Dead and Mirror's Edge was pretty good

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BiancaDK

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Thats what they get for growing too fat too fast. Except for 2-3 titles, there is little innovation to be found. /Care

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gameking5000

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This is deadly serious and I don't think even this year's hits will help as I think it will again loss much profit. This will really hurt the industry

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THA-TODD-BEAST

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For anyone doubting EA: Look to Dead Space and Mirror's Edge. Even Red Alert 3 and Mass Effect are other great, underrated games. Let's cross our fingers they make it through OK.

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tarugista

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Dead Space 2 can save EA

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BlueRaptor7

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"--Electronic Arts is currently working on a lineup of 30 games for Apple's iPhone." Hm, I think I found their problem. EA is still following the "1 in 10" principal, and in these economic conditions, its' no wonder they are scratching their heads at why they just lost $1,000,000,000.

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07pops07

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@coaltango firstly crytek made crysis and crysis warhead not ea secondly crysis warhead was fricing awsome so what are you on and can i get some?

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Stesilaus

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I intended to buy both Spore and Red Alert 3, but abandoned those plans when I learned about the install limits. I doubt that I was alone in making that decision. :|

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costlywar

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EASPORTS, TWEAK -A -SPORT, Kinda has a jingle to it.. That should be the name of thier games. Since that is the majority of the work they do with the sports game.. Then they wonder sales are flat. Hello, the majorty of the games most people want has excellent gameplay, excellent dynamics, excellent graphics, excellent weather lighting, excellent fans (not CLONES) and for the frosty an

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shrink45

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$1 billion? Ouch. At least Mass Effect 2 (hopefully) comes out this year :)

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cjfuka

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EA messed up Ultima Online and did a botch job with Kingdom reborn. EA listens to sales just like Walmart

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RAVEZero

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This is actually kinda disappointing to hear. Just when they've (sorta) realized where they were going with those previous inane business deals and sequels they woke up to more IP's. Whereas ActiBliz makes cash by hoarding moronic sequels of games no one gives a damn about anymore. Not to mention WoW...they are the new (read: old) EA. I do hope they make it through okay. Like mlord5000 said, they are pretty big, and them falling out will take a good chunk out of the game industry, not to mention knock off some good games.

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Kris024

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EA needs to spend money on making better games rather than sports titles every year where the only change is the man on the cover. Making the same games every year( Madden, NBA, MLB, NHL, all the NCAA games, FIFA) is a waste of money.

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coaltango

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actually they deserve it. look how they puked up red alert 3. not to mention crysis warhead. deifntely a step down than the original crysis.not to mention trash games like need for speed.

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OrigSuperMidget

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no if we could do something about that whole "consumer support" thing

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kiramasaki

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--Riccitiello said that he's confident that 10 EA Wii games to be released during the current fiscal year will be hits. This man is not in his right mind Wii wont have 10 hits period let alone 10 EA games as hits; and for that matter i find it hard to believe EA will have 10 hits themselves over everything

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themyth01

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Some heads need to start flying there. Those Officers' salary expenses must be the culprit.

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caocca

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Heeeeeelllllllllllll yeeeeaaaaaaaah!!!!!!!!!! Cut the NFL crap.

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mlord5000

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If EA goes bust then the industry will start to die out. No matter how much people hate EA they control a large portion of the market and control many good game companies (bioware, westwod etc...). If EA goes then they and their games go too. So EA had better shape up to save itself and all the good titles that belong to companies that they bought and maybe a few of their own good titles.

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felipenet7

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give us better games and fire the lazy stuff and you are back on track EA!

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malikmmm

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bad day for gaming industry no matter what kind of background a certain company has...

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RLJSlick

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I hate to see lost like that but I can't feel that sorry for a company that have destroyed so many other great gaming company over the years.

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leimeisei

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Well, it's kinda hard to make any money when 99% of the games you release are games that nobody wants to buy...

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jeffcenate

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i feel nothing for them, they lost 3 sales from me this year because of securom. they are getting what they deserve. and im NOT an EA hater, or i wasnt till securom came along. pirating may cost them millions but look what it cost them to when they accused even their paying customers of being pirates. this should go in the 'ooops, well that backfired' hall of fame.

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dr_jashugan

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Wow, that's a HUGE loss. :|

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DMBcard

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EA is getting what they deserve in my opinion. Tying up the NFL license and ruining the NHL, NBA, and FIFA series. EA Sports just does not compare to the golden days on the Genesis.

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fauljosh

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@ DonTonyDeluca You're absolutely right. We don't need a Madden game every single year. I don't know about the rest of you but I only buy a football game every other year. It would make so much more sense to spend two years on a game to make it great and just do roster updates on the odd years.

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grand17

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dreams do come true die ea

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fauljosh

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Wow that sucks, I've been really interested in a lot of EA games lately. Brutal Legend looks promising, Dead Space Extraction is on my buy list, Tiger Woods 10 on Wii looks amazing. I'll definitely be helping them out this year.

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MetallicaKings

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wow....thats horrible. The amount of jobs that will be lost is really sad. Hopefully they bounce back (maybe with some decent titles ;])

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parhar67

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As long as they release madden fifa and NHL im happy

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RabidHeadCrab

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Hmmm that's sad. Year after year EA cranks out the same boring drivel and makes billions of dollars, then they begin taking chances on new IP's that turn out to be lots of fun and lose money. Please don't go back to the old crap, and stay with the good stuff!!

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ffviiifreak

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on one hand I'm glad karma is finally kicking the crap out of the money hungry executives that mistreat their developers but on the other hand those same developers need their jobs so its a balancing act of opinnion especially when the fate of dead space is in that same balance

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merrimant

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On one hand, as a rule, I hate EA with all of my gaming heart. On the other, I love Bioware. So I really hope they stop with the stupid identical sports games every year *cough*Madden*cough* and instead put that investment capital into good projects!

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imperial_agent

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That's unfortunate for EA. They've been cranking out some new, innovative, and really fun games lately. Here's hoping they recover, and hoping they don't have to lay off their staff.

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gudni

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Riccitiello said that he's confident that 10 EA Wii games to be released during the current fiscal year will be hits. I think the Wii has a great line up from EA in 09 so far that i know of: Tiger Woods 10, Grand slam tennis, Dead space extraction, Need for speed: Nitro, Madden 10, EA sports Active, Boom blox 2 and a new Fifa. Im a pretty happy gamer.

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Cwagmire21

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Is this truly a surprise? This is the company that releases roster updates for all its sports games at a hefty price of $60. While lately, they have started to turn things around with games like Dead Space, Left 4 Dead, etc. - its still not enough.

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Huracan24

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Good, I hope EA learns to publish games once they're finished not half way done. I'd be embarrassed to launch half the games they do. Release dates don't sell games, quality games do. EA makes junkware.

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dkslade

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Nice to see all the games copies sitting on the shelves losing their value each day by not selling. And eventually into the bargain bin. 60 dollar game now 30 or less.Proof where quantity is not better than Quality. or you could say LESS IS MORE.... EA just keep wasting money on 3-5 games a month, and not making a profit to pay all the costs for each title.

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aflakian

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They've cleaned up their act, started focusing on quality, original titles (Crysis, Dead Space, Mirror's Edge, Left 4 Dead, Dragon Age, Mass Effect, Brutal Legend, etc.), and are now posting huge losses for the year. Sad indeed.

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zinoalex

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This news is unfortunate for EA.They have the potential to be a great company.I remember in the late 1970's to mid 1980's EA, under the guideance of Trip hawkins had one the best computer games companies out there.Atari 400/800, Commodore 64(or VIC-20),IBM PC--it didn't matter EA made a great product.This was the first golden age of computer gaming. Maybe EA needs to get back to some of the types of games that were made then.Don't adandon Tiger Woods, or Madden,Continue Dead Space and other titles.Lord of the Rings is also a great series for the company. Don't try to cover all types of gaming.Do what you do best and your company will be successful.Usher in a new golden age by being the leader.

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tomhwrdiii

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honestly, all EA does is reuse old titles year after year. im not surprised at this at all.

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DonTonyDeluca

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i think what ea needs to focus on is original titles with lots of time invested into them with huge replay value. i mean look at fallout 3. huge game, well made, still going strong. i find EAs strategy is to much altering whats already been done over and over and people dont really need a NFS for every style of racing, nor do we need sports game every single year, try 2 years, sales would probably be massive... i dunno. i just think it needs to try something fresh.

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