Is EA up the creek without a paddle?

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Is EA up the creek without a paddle?

Post by Kenny on Wed May 06, 2009 9:08 am

Right let's kick off with news that EA have reported that its net loss over the fiscal year ending March 31, 2009 totalled to $1.08 billion - an increase of over $500 million in losses over the previous year.

The company reported total revenue of $4.2 billion over the year, up 15 percent from the previous year's figure of $3.6 billion.

Meanwhile, the publisher's fourth quarter results rang in to the tune of $42 million in net loss, which was less than expected by analysts. According to EA, sales in that quarter were largely driven by Skate 2, Rock Band 2, The Lord of the Rings: Conquest, Left 4 Dead, (I though Valve made that! hmmm....), and Need for Speed Undercover.

Following third quarter losses of over $600 million, EA quickly moved to cut back its operation, presenting plans in February to close 12 facilities and cut 11% of its workforce.

"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," said EA CEO John Riccitiello today. "EA is well positioned with the right strategies in a growing industry."

My point is this, EA has tried to kick out some new games over the last fall because everyone criticise them for sequel after sequel, (the Sims 2 & Command & Conquer series) and they paid for it. Yet Activision, (if you check my Facebook profile, you will find I have a uni friend who's a "Lead Artist" at Activision and I'm trying to get the exclusive for you on the next Call of Duty game), put out sequel after sequel and has been rewarded handsomely for it.

Hopefully this will be the catalyst of that change EA has needed for a long time. Maybe they should make more Wii games? Milking the Madden and FIFA franchises not such the cash cows they were anymore? The idea of sequels aren't a bad one, but a sequel year after year, regardless of innovation and improvement tends to cheapen a franchise. Have a look at EA's back catalogue, (look under the "Search by Game" field on this page), and the amount of sequels becomes ridicules.

So with EA haemorrhaging money and a lot of it's highly trained technical staff, what is the future for the world's biggest gaming developer? Will they change? And if so, what changes will they need to do? Is the Apple buyout such a crazy idea now? Will the new Sims 3 game feature an "in-game" store where the millions of Sims fans will get overcharged to death trying save the company CEO from selling off his 2nd summer home and his son's Maserati?

Or will Fiat just buy them out and Europe becomes the winner?

It does work!


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