EA Losses Rise In Q2, Over 6% Of Employees Laid Off
So they say they didn't want Take-Two and they're just fine pushing forward on their own...well, perhaps "just fine" is a stretch.
Today, Electronic Arts announced their fiscal results for the second quarter ending September 30. Their net less unfortunately increased substantially from $195 million to $310 million, due partly to "larger marketing and development costs." (via GameDaily) On the other hand, net revenue went up 40% to $894 million, and it's no surprise to learn that the big sellers were Madden NFL 09 (4.5 million sold), Spore (almost 2 million sold so far), and Warhammer Online (1.2 million sold). CEO John Riccitiello said-
"Considering the slow down at retail we've seen in October, we are cautious in the short term. Longer term, we are very bullish on the game sector overall and on EA in particular. The industry is growing double-digits on the strength of three new game consoles and increases in the number of homes with broadband internet connections. EA is well positioned to benefit from these technology drivers due to the strength of our creative studios and our broad collection of game properties--from The Sims, to Spore and Madden NFL, to Warhammer Online."
On top of this, EA revealed they would be implementing a "cost reduction plan" that led to over 6% of EA employees losing their jobs. Of the 9,000 people EA employs, about 600 have been laid off due to this plan, which will save the publisher about $50 million in "annual pre-tax costs." The staff reduction was "global," although we've heard that EA Los Angeles and Pandemic were especially hard hit. So anyway, just because net profit is up doesn't necessarily mean your job is safe...not when the net losses are way up, too.
10/30/2008 Ben Dutka