EA Q1 revs jump, losses tighten
[UPDATE] Deferred online revenue pushes publisher to nearly double its year-over-year quarterly earnings; Bad Company sells 1.6M; Tiberium delayed, PC sports gaming revived.
Getting its house in order has proven to be a costly business proposition for Electronic Arts. Thanks in part to a restructuring effort that the publisher initiated in 2008 to prioritize quality, the publisher has consistently posted soaring revenues at the expense of flagging profits.
Today, that trend continued. Reporting on its first-quarter performance for fiscal-year 2009, EA said that it brought in $804 million in net revenue, more than double its $395 million take during the same quarter last year. However, that number's impact was blunted by the fact it includes $231 million in deferred revenue from a change in accounting practices for unnamed online-enabled games. For the quarter, net losses stood at $95 million, down from $132 million a year ago.
EA tried to spin the lessened losses as evidence that its quality-over-quantity approach was bearing fruit. "We are now seeing the early returns of the change agenda we started last year," said CEO John Riccitiello in a statement. "Innovation and quality are rising, our games are more accessible and fun, and we have more new titles than at any time in our history. From Spore on the PC to Dead Space on the PlayStation 3 and Xbox 360 to MySims on the Wii and Nintendo DS to Scrabble on the iPhone and Facebook, this is the best title portfolio in the company's history."
A number of key titles drove growth for the publisher. Namely, EA said that the DICE-developed Battlefield: Bad Company--released for the Xbox 360 and PS3 on June 23--has sold 1.6 million copies. Other top performers included UEFA EURO 2008 with 1 million units, and Rock Band, which despite being released in November, shifted 800,000 more units during the quarter. EA also noted that Wii-exclusive Boom Blox has now sold 450,000 copies, and is "meeting our expectations."
Trumpeting other wins during the quarter, the publisher noted that the Spore Creature Creator, released for the PC in June, had been picked up by 2.5 million users. In turn, those users had uploaded more than 2 million unique creatures to the Sporepedia in just six weeks, the publisher said. With Activision Vivendi expected to announce its first official financial report later this month, EA also made claim to the top-publisher throne in North America, claiming 17 percent of the market share.
Reiterating guidance issued as part of its year-end report in May, EA said that it still expects earnings to hit $4.9 billion to $5.15 billion for its full fiscal year ending March 31, 2009.
[UPDATE] Following the publisher's earnings announcement today, EA held a conference call to address the quarter's outcome with analysts. While relatively light on new information, the publisher did reveal one delay that will impact its full-year fiscal performance. Namely, the publisher said that the EALA-developed first-person shooter Tiberium will now ship during its 2010 fiscal year, which begins April 1, 2009. Previously, the Command & Conquer-inspired shooter was expected to arrive for the Xbox 360, PS3, and PC this fall.
On the sports front, the publisher also offered an update on the future of PC sports gaming. "As many of you probably noticed, this year we cut back on our PC sports games, but only for a year," said EA Sports chief Peter Moore. "We were retooling these titles to take advantage of the online connectivity in a bigger and more meaningful way. Stay tuned for more on this." In April, Moore said that the sports label would be scaling back its offerings on the PC due to "very serious business challenges."
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