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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AngryFingers

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...just when you thought the videogame industry was doing fine.

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muzik_mafia

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Man, announce Crysis 2 and I'll personally bailout EA :)

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cherrybomb257

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Blizzard = KFC

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speedytimsi

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Not everyone can be like blizzard

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viewtiful_jay

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

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skyjon

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@tranceplant according to wiki, they have 3.6bil revenue, so losing 1bil is akin to losing ~35%.

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NightRain

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Not a huge loss for them. They are rich *******.

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bcroger2

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Yeah the bad economy is hurting everyone :(

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lordrave

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Godfather 2 was the most disappointing game ever! 1 hour of gameplay, I felt sleepy, eager to continue another hour to atlest feel it.., I feel like tearing it apart! ... EA... Quality>Quantity

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ocdog45

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cost money to make money. but damm!

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skyjon

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why did ppl down kuddles' post? What he said is completely true. Activision-Blizzard is doing extremely well because of games like guitar hero and WoW, games without real updates. Just think about the types of games EA has released this year, almost all of them were original IPs. Want to know what makes EA money? a new unoriginal FIFA and unoriginal NCAA. Just you watch, we are going to have like 5 versions of FIFA next year lol

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Fumpa

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Why do people hate EA? I don't get it. They make some great games. If we lost EA then we'd lose a ton of good titles.

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Zerosumgame

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Keep it up EA, you will file Chapter 11 in no time! can't wait to see them close down Vancouver studio.

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kuddles79

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You people do know how dumb your comments are? The only thing keeping EA afloat right now is their annual sports games, Need for Speed, Sims etc. They're losing money because of how much focus they spent on new and original games like Dead Space and Mirror's Edge, and they're probably going to lose more when titles like Brutal Legend undersell too. Meanwhile, Activision is doing better than ever by releasing a new Guitar Hero cash-in every month. The only lesson they're learning is to go back making more crappy games, the opposite of what you claim.

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TheKungFool

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If you've willingly spent millions buying out companies like BioWare in an attempt to hold a monopoly in the industry, then you're got to be willing to take the biggest hit when said industry is down.

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gemno

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Excellent! Down with EA and their DRM! Crap led company, selling crap filled with more crap and treating their employees like crap. I buy all my games and I say ... NO MORE EA! NO MORE EA!

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deactivated-57af49c27f4e8

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they deserve it after spore.

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slayerss3

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I still havent seen anything about another company putting out a nascar game seeing EA wont be on PS3 and xbox360.. anyone else know ?

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Butcherski

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Yaaaaay i hope EA looses more money. Then some more. Maybe at some point one of the CEO's will realize why ... Hell its about time those leeches get some of their own medicine

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SalarianChemist

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EA always seems to lose large amounts of money, yet still remain in business. EA needs to cut thier ties with hardware platforms that cost more and yield less return (e.g., the Playstation 3), and instead focus on the Wii and Xbox 360, because those are the systems that constantly produce high sales. EA might also want to consider the philsophy of simply releasing "updated rosters" through downloads to previous sports games, rather than releasing new $60 sports games in every sport every year. Think about it...There are people out there who spend $60 every year for all the major sports. But this has been declining because of the recession. If EA were to release updated roster downloads at a reasonable price, it would actually improve game sales because people know they would only need to buy the game once, rather than every year.

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Hazzerz

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This is usually bad news....usually.

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skyjon

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I understand that most people on here, including myself, do not like their sports games that much. However, you need to also understand that sports games are where the money is at. Not just EA, but every company likes to make money. I mean, come on, who doesn't? Also, as much as I like RPG games, people have to understand that RPG is NOT where the money is at. With the exception of Fallout 3, I seriously cannot name one RPG that has sold decently well this generation. The fact that EA lost a lot of money may actually be caused by internal corruptions (corporate bonus) and useless company sectors. My best bet is that EA will soon have its company restructured.

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dmdavenport

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Another year like that it will be RIP, EA.

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kono11

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Something like Fallout might be better.

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Lo0o0oNg

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i love EA's games.. they get so much hate cause they're the big dogs. anyways, its sad to see any company in the gaming industry take such a big hit.

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msharki

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I know they publish a good deal of crap, but they also have some good games out there like Dead Space. How are they losing so much money? I don't get how Konami posted such a huge gain when other companies are losing so much. Pretty soon Activision will be the only third party publisher out there.

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knicknut17

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To the people who are confused about EA's 1 billion dollar loss...Just because you sell more stuff doesn't mean that you're going to make a profit. Obviously their expenses were more than their profits. I thought EA did a good job PUBLISHING good games for a change last year. Lead 4 Dead and Rock Band 2 are prime examples of this.

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halosniper52

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Ea has some good games here and there (I love Madden myself) But for each good EA game there is like 5 bad ones. They just need to slow down with making so damn many games.

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MidniteShadow

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Lame, need more people to play WAR, its such a great game, RB2 owns GH, they got some solid titles comming up, cant wait for brutal legends. They need to stop releasing half ass games and put more quality games, pls go back to need for speed most wanted, that one was the best NFS on the nextgen consoles. Hopefully their affiliation with ONlive will turn out to be the smartest move they done in the past years. But they have been releasing some great new IPs, deadspace is awsome, we need more like that :).

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Shadow_Fire41

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i completly agree with bbsavage. also,make some RPGs, or something.

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bbsavage_63123

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ya they should try making games that our actually good. also stop selling us sports games where the only thing that changes is the year on the cover.

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Roushrsh

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So wait...they sold more but they made a bigger loss? What?

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rnd10

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Many of EA's games are mediocre, that's why.

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07pops07

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some of you saying good or i hope they lose money try and remember people work there its not just a giant robot company. also EA put a pretty nice effort last year they coulda of done better but there were alot of worthy games,this year looks alot better then last year with tiger woods wii ,grandslam tennis, bf badcompany 2, dantes inferno, deadspace extration.......i could name more but ill stop...just remember this if ea tanks alot of people lose their jobs and ea partner program will be gone (meaning devs like valve , crytek and smaller devs will be outta luck)

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jrabbit99

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EA has to pull it together

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lew_0911

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Wow. A billion dollar loss and they're still standing? They must really have a lot in their coffers.

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Misfit119

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Oh wow they are surprised that the Need for Speed series has gone downhill? I can't imagine. They release a few incredibly excellent titles in the series and then the next few games move entirely away from what made those titles good. Ic an't imagine how things could have gone so wrong.

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MatzeEdend

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I thought Warhammer Online would do better than that. EA makes good games though, they're only major problem is mismanagement.

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Nerkcon

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Damn, I'm starting to fear for Warhammer Online. I heard it drop to 300k then went to 350k, got it backwards. :( But it is doing much better than Age of Conan! :P

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dannyatkinson

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Stupid DRM and crappy games.... Yes EA has no one to blame but themselves.

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FidelSarcastro

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The only EA games that I actually buy are the NCAA Football, Madden and maybe Fight Night, but thats it. I mean used to they had good games but now its like they put the focus on quantity over quality. Maybe now they will focus on a smaller line of better put together games. the downside is that they will be less likely to invest in new innovative games that might break the mold creativly.

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okassar

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HAHA!They deserve this,they also deserve Activision-Blizzard taking the throne of "the biggest game developing/publishing company."

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Un4givingAsault

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They crossed the Rubicon, and we witness Rome burning

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Infinite-Zr0

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Maybe EA will finally realize they've been going backwards that last couple years, and get their act together to not put so much BS in their games.

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ScreamDream

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EA for many years has had too much management, project coordinators, directors, etc and not enough developers.

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gnbfd

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wtf? 1 billion loss? But they had so many good games last year. Madden was good. RB2 is amazing. NHL 09 is the best hockey game ever. Mirror's Edge and Dead Space were sweet new IPs. Battlefield: BC was good. Burnout Paradise is still fun after a year. I don't get it. Also, RB>>>GH. If only the general public new this.

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rock_solid

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EA SUCKS

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ChamomileBaths

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raahsnavj, games come with as much content as they ever have. Halo 3 blew away Halo 2, Fable 2 had at least as much as Fable 1. DLC, when done right, adds meaningful gameplay that would have been too expensive to add in production at a low cost. I think that's perfect. And EA HAS seen success on Wii. Boom Blox, Madden, Tiger, Skate Ir (not sure on the sales for that). I'd give Riticello this one last shot. I really like him, he's turned the company into a gamer's game company again. They make pretty consistently great games.

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deactivated-57fce817a4cf5

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What the hell! They sell more stuff but their earnings are down? How the hell are you supposed to stay afloat in this industry?

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