Real Talk From The HipHopGamer

EA Posts 1 Billion-Dollar Loss

Posted on 05. May, 2009 by bakerboy in Microsoft, Nintendo, Real Talk with the HipHopGamer, Sony

It’s been a rough year for the industry, but few companies have taken it on the chin like Electronic Arts. Today the publisher released its financial results for the fourth-quarter and fiscal year ended March 31, showing that the company limped to the finish line in a year that saw it lose over a billion dollars.

EA’s financial results were almost as grisly as a good round of Left 4 Dead.

Net losses for the 12 months were just under $1.01 billion, more than twice the previous year’s $454 million in red ink. However, the publisher’s sales were up for the year, with revenues jumping 15 percent year-over-year to $4.21 billion.

For the fourth quarter on its own, EA posted sales of $860 million, down nearly 24 percent from the previous fourth quarter’s $1.13 billion haul. Those sales were led by Skate 2, Rock Band 2, The Lord of the Rings: Conquest, Left 4 Dead, and Need for Speed: Undercover. The good news for the publisher was that it only has a net loss $42 million during the three-month stretch, compared with $94 million over the same period last year.

In a statement accompanying the release of the numbers, EA CEO John Riccitiello focused on the company’s future instead of its rough recent past.

“EA’s strong cost actions in Q4 FY09 together with our investments in our digital service businesses will set us up for a stronger FY10,” Riccitiello said. “EA is well positioned with the right strategies in a growing industry.”

Unfortunately, those strategies might take a while to turn things around. EA updated its fiscal 2010 guidance, saying it expects revenues for the full-year to be down to between $3.7 billion and $3.85 billion. It also expects to lose money in fiscal 2010, although not quite as much as in fiscal 2009. For the full year, EA is expecting losses between $274 million and $469 million.

Electronic Arts is holding its quarterly conference call with investors this afternoon. This story will be updated with details as appropriate.

[UPDATE] Highlights from the conference call are listed below:

–Pandemic’s recent release The Lord of the Rings: Conquest has sold more than 1 million copies.

–The most recent info on Warhammer Online puts the game’s dedicated player base at 300,000.

–Electronic Arts is currently working on a lineup of 30 games for Apple’s iPhone.

–EA Sports Active is confirmed for release this month.

–Riccitiello says he’s confident that 10 EA Wii titles release during the current fiscal year will be hits.

–The Sims 3 should be a major reason why EA Play division sales are expected to be up $300 million in the coming year. There will be DLC for the game on day one, as well as Apple Macintosh and iPhone versions.

–EA Sports revenues are expected to be flat for the year, while EA Games should be up on the strength of Mass Effect 2, Dragon Age, Army of Two: The 40th Day, and more.

–In a Q&A session during the call, EA executives acknowledged “softness” in the rhythm game category that has caused them to lower their expectations for that part of their business.

–Riccitiello said that he doesn’t think softness in the Wii market in Japan necessarily presages similar softness in North America. However, he does think Asian trends like subscription-based games are gaining considerable traction in the West.

–When asked about research and development spending for the next generation of consoles, Riccitiello says that he hasn’t seen indications that a next generation needs to come anytime soon. He adds that the current generation could definitely be an extended console generation because there isn’t as much need for advancement now that gaming his entered the HD era.

–Riccitiello says one of the company’s problem titles that suffered as a result of the economic downturn last year was Need for Speed. EA is confident that this year’s Need for Speed, Madden, and FIFA titles “feel very strong,” He also points to EA Sports Active and Brutal Legend as potential breakout titles.

Courtesy of Gamespot.com