Sims 3 sells 3.7 million as EA reports mixed financials

Deferred revenue costs force third-party publisher to report $234 million loss despite increase in sales; latest life-sim nears quadruple-platinum stats, EA Sports Active sales top 1.8 million.

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The Sims 3 was EA's sugar daddy last quarter.
The Sims 3 was EA's sugar daddy last quarter.

Following Microsoft, Nintendo, Sony, Capcom, THQ, and Sega Sammy, Electronic Arts has reported its earnings for the quarter ending June 30. Like many of its rivals, the company reported a loss--a $234 million loss, to be exact, on $644 million in revenue. During the same period in 2008, the company reported a $95 million shortfall on $804 million in revenue. Its loss per share was $0.72, compared with a $0.30 loss per share the year prior.

In a post-earnings conference call, EA CEO John Riccitiello blamed the ongoing recession and "the impact of deferred revenue" for the deficit. His company revealed that, outside of generally accepted accounting principles (GAAP), its net loss was just $6 million, versus a net non-GAAP loss of $135 million from April-June 2008. Its non-GAAP revenues were $816 million, and its non-GAAP loss per share was just $0.02, up from a $0.42 loss per share during the year prior.

EA's loss came despite the company declaring itself the top third-party publisher during the April-June quarter. The company singled out Fight Night Round 4, EA Sports Active, and The Sims 3 as its top earners, with the latter two games selling 1.8 million and 3.7 million worldwide, respectively. The NPD Group reported four of the top 10 US game SKUs in June were published by EA: EA Sports Active (Wii, 289,100 units), Tiger Woods PGA Tour 10 (Wii, 272,400), Fight Night Round 4 (Xbox 360, 260,800 units) and Fight Night Round 4 (PlayStation 3, 210,300 units.)

EA Sports Active now holds the distinction of being the best-selling Wii game ever published by EA, claiming a 21 percent share of the North American software market for the console. (In Europe, it claimed a 13 percent Wii market share.) The company has been aggressively going after the Wii market, going so far as to bundle Tiger Woods PGA Tour 10 and the far less popular Grand Slam Tennis with the Wii MotionPlus peripheral in the US and Europe, respectively. EA also released Boom Blox Bash Party, which has sold just over 70,000 units in the US as of June 30, according to NPD.

Looking ahead, EA is sticking to its full-year guidance of $3.7 billion to $3.85 billion in net revenue and a per-share loss of $0.85 and $1.35. Non-GAAP revenue is expected to be $4.3 billion, with per-share earnings of $1.00.

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