EA Posts $641 Million Loss; Cuts 1,100 Jobs

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Electronic Arts is squeezing 1,100 jobs as a result of cost reduction plan that includes closing 12 yet-to-be-named facilities. The news comes as the company announced a $641 million loss for the quarter ended December 31, 2008 (fiscal third quarter). Net revenue for the quarter was $1.65 billion, up $151 million as compared with $1.50 billion for the prior year.

“Our holiday quarter came in below our expectations and we have significantly reduced our financial outlook for fiscal 2009, a clear disappointment,” said John Riccitiello, Chief Executive Officer. “We delivered on game quality and innovation in calendar 2008, with 13 titles rated 80 or above — more than any third-party publisher. We expect to build on this great quality record in the year ahead while delivering more profitability.”

On the positive side for EA the company announced that it sold 5.2 million copies of Need for Speed Undercover, although it did not fair nearly as well in its reviews. FIFA 09 was their best selling title with 7.8 million copies sold and charted at number one across all platforms in Europe in the holiday quarter.

Delving deeper into their financial statement, the company saw massive increases in demand for PlayStation 3 software. PS3 software sales increased 113 percent year-over-year, surpassing the Wii as the #2 platform for the company in terms of revenue. Xbox 360 and Wii saw modest revenue increases at 35 percent and 25 percent, respectively. Xbox 360 accounted for 16 percent of company revenue, PS3 for 13 percent and Wii for 11 percent.

The Nintendo DS and PSP saw declines in revenue with the DS dropping 6 percent and PSP a dramatic 53 percent. One of the reasons for this of course is that there were 9 DS releases for the quarter as opposed to 5 in last year’s third fiscal quarter. The PSP had only 3 compared to 4 the year prior.

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