ErikStenger
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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.
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.
