EA Sees $641 Million Q4 Loss, More Titles Delayed
The holiday season was a grim one for Electronic Arts
After announcing thousands of layoffs and delays of core titles like The Sims 3, Electronic Arts had even more bad news for gamers yesterday.
Due to sluggish holiday sales, EA posted a staggering $641 million loss for the fourth quarter of 2008. The last quarter of any calendar year is typically a boon for the gaming industry, with the holiday season spurring hardware, software and peripheral sales. According to Reuters, The $641 million lost last quarter (which was EA's third fiscal quarter for 2009), was quite the jump from $33 million lost in the same time period one year ago. However, much of the losses were incurred due to one-time charges related to restructuring, and well as the company's wireless gaming division being devalued.
EA also saw several of its highly-anticipated titles fall short during the holidays. While hitting the one million mark isn't necessarily bad, the company was expecting higher sales for titles like Dead Space and Mirrors Edge. The Need for Speed franchise also underperformed during the holiday period. Due to the reeling economy, many retailers are keeping less stock of most games, unless the game is part of a consistently successful franchise like Madden NFL or The Sims.
With 2009 comes title delays as well as refocusing the company. The Sims 3, Dragon Age 2, and The Godfather 2, were all big name titles expected in EA's 2009 fiscal year (which ends in April). EA is now saying that all three titles have been pushed back, and will be released sometime in the fiscal year 2010. Also, the software giant is planning on giving the Nintendo Wii more of its attention. With the Wii Remote's MotionPlus add-on coming out this year, EA's goal is to overtake Nintendo on its on console in terms of software sales. "The Nintendo Wii is even more important than one year ago. It is a clear leader in this cycle," said EA CEO John Riccitiello. "In 2008 we were No. 3 in this platform in North America and Europe but we need to move further up on the charts." The CEO also said his company would produce 10 to 20 percent fewer titles in 2009 compared to 2008. While a steady stream of games is always demanded by the public, quality over quantity is the new motto.
Despite its recent hardships, EA is keeping an optimistic outlook for its fiscal year 2010. Despite adding an additional 100 layoffs to the 1000 already expected, Electronic Arts is consolidating its efforts while emphasizing development on the world's number one console. The games industry is expected to weather the current recession better than most, and while things may look grim for EA now, don't count them out yet.
You can read EA's entire press release here.
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I feel bad for the people who will lose their jobs but quite frankly a loss like this really couldn’t have happened to a more deserving company.
The never ending annual sports title sequels that offer nothing new, the crappy PC to console and console to PC ports and the conveyor belt of mediocre title releases that rely on marketing not quality of gameplay to sell.
After i blew 50 bucks on the crappy Tiger Woods golf game I say it should have happened a year ago.Don't live long and prosper E.A.
I have to agree with JeanLuc, no company is more deserving of this. EA is all about quantity over quality, and it shows in every game they release. They practically admit it here: "EA's goal is to overtake Nintendo on its on console in terms of software sales." Horray for more Mini games! ...
One place to for EA to start improving is by not using SecuROM.
Wow. I hate to see anyone lose their jobs. I just wonder how much of it's also backlash against not only the crappy titles, but the DRM issues that came with Spore and other games?
Of course, Microsoft has an issue to fix with the expired certificates with their PC version of Gears of War. Not good.
DRM doesn't curtail piracy. It more than likely causes more people to pirate the software than to purchase it. Still doesn't make their actions justifiable, but I understand their pain.
Are they basing this off of revenue or the number of root kits installed? Treat your paying customers like criminals and expect no compassion in hard times I say.
I agree with everything above, except curnel's lack of respect and genderbender. I have bought Tiger Woods 2009 for the Wii, the first sport game I ever bought, and I really enjoy it. Then again, it's mainly because I get to use the Wii remote.
"quality over quantity is the new motto."
Now that's something positive in this ocean of bad news. It's only taken them 10 years or so to realize. Now let's hope they actually do quality, and deliver us more bullfrog or maxis quality titles.... somehow I'm not too optimistic
I personally have held off buying about $150 worth of EA games because I'm scared of their DRM. If it were not for the Fight Night boxing series I'd hate their company completely. That game is awesome.
Bioshock
C&C2
Farcry 2
Crysis Exp
I HATED EA in the last generation, so I found it refreshing to see them release new IP's recently. What worries me is that they're going to change their tune and go back to what they thought brought them money. Pumping out crappy titles.
Don't get me started on focusing on the Wii. It's great for my kids, parties and for non-gamers, but sucks for real gaming.
@curnel_D...news flash. EA bought Bioware/Pandemic last year.
I wonder how the other game industries are doing. After all, this seems to refute the commonly touted hypothesis that people loosing incomes and jobs will divert their cash into entertainment purchases such as video games.
Again EA needs to stop limiting the installs........Either they want us play their games or not.You can't your cake and eat it too.
5 installs ........What a way to treat you customers.
"After announcing thousands of layoffs and delays of core titles like The Sims 3, Electronic Arts had even more bad news for gamers yesterday."
LOL, I think there's a lot of people who think this is great news that EA are finally getting their long overdue comeuppance.
DIE EA DIE!!!!!!!
Hey EA, you asked for it and you got it. Screwing over your loyal PC fans who have been with you since the early 1990's and trying to convert us into zombie-like console gaming morons. Add to that the DRM on the games that you haven't canceled on the PC.
I vowed never to buy a single game title with EA printed on it - I don't care if you're the publisher, author, or even just the distributor. You wanted to fight piracy by canceling PC versions and DRM. Guess what, in my case, you just encouraged it. I just downloaded your crap games yesterday for free with no DRM. HAHAHA.
I'm not a fan of The Sims but I must say I find it foolish that they are delaying The Sims 3. This is a title that would no doubt sell in the millions and help them recover their losses.
Also I believe a big help to them would to rethink using DRM which would no doubt boost the sales on their PC games. Spore may have sold a million copies but lets be honest it should have sold allot more with its hype.
Come on, why wouldn't you want to buy an EA game for the PC? You get a dvd containing a great set of malware/spyware/rootkit tools! It makes the 60$ for Crysis Warhead totally worth it!
What's really really sad is that they won't even realize that alot of the loss is from the DRM crap that everyone hates. They'll just use the old "economy is in the crapper" excuse that's so popular nowadays and keep locking down games to 5 installs.
5 Installs? F'n pathetic. Makes me want to go rip off Spore right now, and I think the game sucks.
With all the comments, i'm suprised that EA hasn't take notes.
They better straightened up, or prepare to be out of business.
EA had became this greedy corporations who ripped their customer off. See what they've done with Westwood and C&C franchises. Horrendous
EA needs to stop buying companies that it can't support and actually work on putting out quality games instead of a swarm of sub-par games. I've always hated hearing how EA has bought great game companies and bring them down to their knees. I'm not a console person at all but what kind of idiots at EA can't see how big the Wii is, its not going anywhere anytime soon. Would hate to see people loose their jobs but I hope EA starts making changes, no bailouts for them.
I have a PC and a Console. I prefer PC games. I like the interface better and usually i can get better graphics. Also, console games cost too much. Mirrors Edge is like $70 USD for the Xbox 360 and $40 for the PC. My 360 is basically a DVD player. I think the last game I bought for it was Assassins Creed. Fallout 3 on the PC was awesome. Once I finished it I played around with the cheat codes and stuff. It's the game I load if I just feel like sniping stuff for a while.
EA should of known better than to screw with loyal fans that supported them!! DRM is totally there downfall and they will have to learn the hard way. I've totally banned them and will not support them with DRM involved in their titles!! It's is really a shame they treat their customers like criminals!! Hopefully they will learn from their lossess!!
Dragon Age 2? *facepalm*
Boo for bad games and DRM. O.k well I did buy dead space and that's awesome, but otherwise...
I feel sorry for the people who lose their jobs but its good to see EA is suffering.
Maybe once they lose another 500+ million they will start to listen to their customers and provide real gameplay again.
Yeah they closed several good studios, then turned around and shelled out a ton of money for a casual game service. I think you could find a lot of that loss came from that purchase.
Everyone in the industry thinks that DLC is the way of the future, you're going to see less and less quality studios producing less and less quality titles.
Why? because everyone and their slow-witted cousin is playing f*ing farmville.
Which is a really $#!77Y app BTW.