Mega publisher Electronic Arts has
revealed its second quarter fiscal results and the situation is less than stellar. Following a
$95 million loss in its first quarter, EA has announced a loss of $310 million for the quarter ending September 30. Titles that excelled in the quarter included
Madden NFL 09 (4.5 million units sold),
Spore (2 million units sold) and the new MMO
Warhammer Online (1.2 million units sold).
Due to its continuing losses, EA has also announced company plans to let go about 600 employees -- 6% of its entire work force. Coming into the holiday season, EA expects to close the gap caused by losses but something tells us that at least 600 people could care less.
Reader Comments (Page 1 of 1)
stinger503 @ Oct 31st 2008 10:09AM
I wonder if those 600 people were from public relations?
grim109 @ Nov 16th 2008 2:27PM
EA should think about customer relations more and how they are perceived as jerks.
I think some people are stronger than me and will boycott them permanently no matter what game they just released.
I have, however, been trying to buy used when I buy an EA title so they don’t get a new sale credit.
I am sure that they will find a way to mess that up on the console just like they did with Spore on the PC.
In the near future, we will be entering in license keys before we can play the next NEW EA title on the XBOX 360, it will talk to the EA license server and make sure that the key has been licensed to only one XBOX 360, and then 3 years later EA will no longer support that game on the license server and it will quit working no matter if you legitimately own the game or not.
Just wait, this is EA’s usual response to losing money. It is not the fact that they are evil $%##@!, it is the pirates and the game swapping, so let’s punish people that legally own their software by making some piece of crap restrictive license management system/policy.
People hate you EA and the way you operate. Plain and simple.
Philip @ Oct 31st 2008 10:09AM
well when your a giant, and buying several companies, you have to let people go
Waynow @ Oct 31st 2008 10:12AM
Theyve been releasing the same sports games for years. Maybe people are finally starting to catch on...
tabicat @ Oct 31st 2008 11:30AM
Apparently not, because Madden NFL 09 is one of the big sellers.
ploppy @ Oct 31st 2008 10:17AM
Must be all that paid DLC that you can unlock just by playing the game.
Or maybe EA has over invested...this IS the company who tried to grab Rockstar and Epic is it not?
Credit Crunchy Nut Cornflakes
Rambler @ Oct 31st 2008 10:26AM
Maybe if they made their games with a higher quality. and actually provide support for said games after they are released, maybe people would buy their games.
... an original game never hurts either
tomuss @ Oct 31st 2008 10:31AM
mirrors edge and spore not original enough for ya?
D dogg @ Oct 31st 2008 11:17AM
Or how about Dead Space...
And let's not forget, they're one of the ONLY companies still in the RTS realm as far as series.
We still have Starcraft but no more Age of Empires.
Waynow @ Oct 31st 2008 12:30PM
I dont think it was EA who made spore. And theyre the only company making RTS games because theyve eaten up the other RTS companies. (rip westwood)
Xav de Matos @ Oct 31st 2008 6:31PM
Spore was made by Maxis. Maxis is owned by EA.
Waynow @ Nov 1st 2008 3:08AM
Because EA ate up you moron
joeybeast @ Oct 31st 2008 10:27AM
Let's assume the 600 people on average make $ 100,000 a year.
Each quarter they cost the company 600 x 100000 x 1/4 = a mere $15,000,000.
Come on EA by my calculation, you need to fire 12,000 people to break even.
salty @ Oct 31st 2008 10:31AM
I hope you're not a business major.
Perno @ Oct 31st 2008 10:34AM
Wow that's a lot of people making $100,000 per year.
joeybeast @ Oct 31st 2008 10:49AM
I'm a renegade accountant.
Garfunkiel @ Oct 31st 2008 3:46PM
Here's the problem, joeybeast:
If 600 is ~6% of their workforce, how many employees work there? Hint: Fewer than the 12,000 you suggest firing.
joeybeast @ Oct 31st 2008 12:10PM
Do you people have no sense of humor?
Octantis @ Oct 31st 2008 12:17PM
I'm not sure where EA's offices are but if it is on the coasts the people are most likely making more that $100,000. I read a story earlier today where cops in Vallejo California were making $150,000 a year. Figure in benefits such as health insurance and retirement and we are talking real money.
Most likely they needed to fire some people after buying up a lot of companies like Phillip said above. Every time two companies become one you can delete the overlap. Say CEOs, VPs, Accountants, Legal. And keep the talent such as designers, programmers, intellectual property.
big bundy @ Oct 31st 2008 10:29AM
EA needs to produce more titles like Dead Space. I was never a huge fan of the EA Sports titles. Not saying they are bad, just saying I never play them.
Delirium @ Oct 31st 2008 10:33AM
EA needs to appease the gamers, not piss us all off.
Rambler @ Oct 31st 2008 10:43AM
Most of the games they release every year are updates of old games. Every sports game they make, Need for speed, etc.
Rambler @ Oct 31st 2008 10:44AM
that was meant for tomuss
readmore @ Oct 31st 2008 10:57AM
See, here is where I'm confused. I'm not great at understanding economics, but when they say "losses" do they mean as in after expenses are paid they are out $310 million or do they mean that compared to projected/last year's profits they made money, but it was $310 million short of what was expected.
I live in Canada and the banks here do that all the time. Report "losses" when in fact they mean "made less then last year".
pandlcg @ Oct 31st 2008 11:10AM
It means actual losses, but unless you look at the income statement you don't know if they actually had negative cash flow or just income statement losses. For example they could be cash flow positive but had large non-cash flow expenses (such as depreciation expense).
Having said that the fact that they're cutting employees points to an actual loss.
Grant @ Oct 31st 2008 11:18AM
usually a quarterly loss for a business is when their revenue doesn't match their expenditures.
If it's just a reduction in profits over the previous year, that's exactly what they would say, not a loss.
Most companies invest most of their revenue in new projects based on projected sales and don't keep their assets liquid, so if they don't meet projected sales, it's real easy to fall into the loss side.
pandlcg @ Oct 31st 2008 11:11AM
Maybe they are cutting the forum moderators that are going to be responsible for banning everyone from their games.
Jason Chapa @ Oct 31st 2008 11:49AM
Didn't EA bet that PS3 would win the console war? Maybe they lost money focusing on PS3 instead of Wii or 360.
Hak @ Oct 31st 2008 11:56AM
yay!!
600 people will form several new companies to make some nice interesting games with no drm.
Dr Dave @ Nov 1st 2008 10:18AM
Mybe video game makers should drop prices, they should know that with parents loosing jobs and houses means Bobby's parents cant buy as many video games when they can't afford a box of KD, Just wondering if the CEO's at EA still got their bonuses while they are laying of all those people. Layed off workers can't buy video games.