Electronic Arts Suffers $45 Million Loss

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Electronic Arts Suffers $45 Million Loss

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Weak Medal of Honor: Warfighter sales have forced Electronic Arts to scale back its earnings forecast for 2013.

Electronic Arts reported a $45 million loss for the fiscal quarter that ended on December 31, 2012, which isn't good except when held up against the company's results over the same period last year, a loss of $205 million. But while the loss has improved, the revenue situation has not: Revenues for the quarter hit $922 million, compared to $1.06 billion the previous year. In response, EA reduce its annual earnings guidance slightly, from $3.85-4 billion to $3.7-3.8 billion.

"The economy hasn't gotten any stronger," EA Chief Financial Officer Blake Jorgensen told Reuters. "It's a little early for me to know how strong the market's going to be, so based on that we widened our range for revenue for the fourth quarter and brought our guidance down slightly just to make sure we're prudent."

But analyst Michael Pachter said EA is being "overly conservative" in the wake of disappointing Medal of Honor: Warfighter sales, which were bad enough that the publisher revealed yesterday that plans for future games in the franchise have been shelved. "They were probably a little shell-shocked by how bad holiday demand was, and I think at the low end they're probably assuming demand is down 20 percent or so," he said.

BMO Capital Markets analyst Edward Williams also noted that some of EA's troubles are beyond its control, as the entire industry is suffering from a downturn in demand as consumers await next-gen hardware from Sony and Microsoft. "The guidance pretty clearly represents a lot uncertainty in the market and that uncertainty stems from recent performances as consumers are pretty aware of new consoles coming," he said.

In other words, the news may not be great but it's not necessarily all that bad, either. EA also announced that its digital business is continuing to grow, with games and services for mobile (including handhelds) growing 18 percent year-over-year to roughly $100 million, and that its Origin platform now has more than 39 million registered users and distribution deals with 86 independent developers.

Source: Reuters

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Hopefully this is a sign that people are getting sick of EA's terrible business practices.

Maybe EA'll have a change of heart and not act like twats anymore, but I doubt it.

"The economy hasn't gotten any stronger," EA Chief Financial Officer Blake Jorgensen told Reuters. "It's a little early for me to know how strong the market's going to be, so based on that we widened our range for revenue for the fourth quarter and brought our guidance down slightly just to make sure we're prudent."

Wrong the market is as strong as ever Blake, its just you guys are making crap games and bad business practices that people want no part in. You can blame it on the economy, the community, the media, everything but what you are doing wrong.

Andy Chalk:

"The economy hasn't gotten any stronger," EA Chief Financial Officer Blake Jorgensen told Reuters. "It's a little early for me to know how strong the market's going to be, so based on that we widened our range for revenue for the fourth quarter and brought our guidance down slightly just to make sure we're prudent."

In other words, it's everyone's fault except our own.

Ah, this news brings me joy.

Andy Chalk:

BMO Capital Markets analyst Edward Williams also noted that some of EA's troubles are beyond its control, as the entire industry is suffering from a downturn in demand as consumers await next-gen hardware from Sony and Microsoft.

Or it could just be the super-saturation of the gaming market. Even if I were to only stick with "AAA" titles, I couldn't keep up with the games I like. Also, I (and everyone else) knows that if you wait 3 months, you can get a game for a third of the price from most major retailers during one of their many sales. Last gen, Halo: CE was $40 new until the bitter end. Now, every Halo is $20 or $30 brand new all over the place (with the exception of 4 that I still see for $39.99 a lot of weekends).

Andy Chalk:

... that its Origin platform now has more than 39 million registered users ...

This is also a load of shit number... I have an Origin account. Its because I did some creation for my FIFA 11 ultimate team. I always love when these companies make these statements. This is just like my Google+ account existing since I have a gmail account.

I'm heartbroken. This just tears me up inside.
/sarcasm

It's all going according to plan... >:)

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One thing EA will NEVER stop earning? My contempt.

And yet there cash increased to $1.158 billion

(http://files.shareholder.com/downloads/ERTS/1915116824x0x631760/1b17f86a-b47b-44bc-aeb5-8efd05713573/Q3FY13_Earnings_Release_FINAL.pdf)

from $871 million last quarter

(http://files.shareholder.com/downloads/ERTS/1915116824x0x609756/f8bc4090-676b-44ee-b7ff-5ffa6c8c2a70/Q2FY13_Earnings%20Release_FINAL_withPressTables.pdf)

so their actually doing better.

On the one hand: I am happy to see a company I loathe failing.
On the other hand: I feel bad for all the innocent people who might lose their job.

I just HOPE EA goes where THQ went, so that some brands might get bought out by good companies.

karma9308:

Andy Chalk:

"The economy hasn't gotten any stronger," EA Chief Financial Officer Blake Jorgensen told Reuters. "It's a little early for me to know how strong the market's going to be, so based on that we widened our range for revenue for the fourth quarter and brought our guidance down slightly just to make sure we're prudent."

In other words, it's everyone's fault except our own.

I don't think I've ever seen a press release from EA that didn't blame outside forces for every last mishap of theirs. They'll even blame their own customers like with the Medal of Honor thing or the "clarification" of the ME3 ending.

Diana Kingston-Gabai:
It's all going according to plan... >:)

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That is an amazingly hi-res picture of Mr. Burns, it's so purdy. The animation quality not the character... I er...

Aaaanyway, EA suffers a loss? Good news everybody!

image

Oh EA one moment people agree with you, the same day they return to wishing for your doom.

EA makes bad game, expects it to sell good, it doesn't, EA says it will stop making this type of bad game and will instead milk Battlefield annually instead.

Whilst for once a publisher basically got the hint that "YOUR GAME SUCKZ!!!" they instantly miss the mark again by announcing their plans to turn Battlefield into their own COD. Well even MORE into their own COD.

One step forward, 15 back. Keep on going EA.

Earlier today, I posted in a story about Dead Space 3 that if EA is so desperate to monetized through microtransactions, they either need to sell content that drastically customizes a gaming experience or stop selling games for $60 a pop

This is why

Kumagawa Misogi:
And yet there cash increased to $1.158 billion

(http://files.shareholder.com/downloads/ERTS/1915116824x0x631760/1b17f86a-b47b-44bc-aeb5-8efd05713573/Q3FY13_Earnings_Release_FINAL.pdf)

from $871 million last quarter

(http://files.shareholder.com/downloads/ERTS/1915116824x0x609756/f8bc4090-676b-44ee-b7ff-5ffa6c8c2a70/Q2FY13_Earnings%20Release_FINAL_withPressTables.pdf)

so their actually doing better.

Looking at the rest of their B/S doesn't paint a pretty picture though. I'm unable to see the report for Q4, but if the trend showed is staying steady, it isn't good. Their long term assets are trending lower while their current assets and long term liabilities are trending higher. Sure, they aren't going to declare bankruptcy anytime soon, but that isn't a trend I'd like to see if I'm CEO, CFO, or COO.
Source: http://www.marketwatch.com/investing/stock/ea/financials/balance-sheet/quarter

Fun (well financial fun) Fact! EA has a ton of accumulated depreciation. They must have a lot of old computers/equipment.

Kumagawa Misogi:
And yet there cash increased to $1.158 billion

(http://files.shareholder.com/downloads/ERTS/1915116824x0x631760/1b17f86a-b47b-44bc-aeb5-8efd05713573/Q3FY13_Earnings_Release_FINAL.pdf)

from $871 million last quarter

(http://files.shareholder.com/downloads/ERTS/1915116824x0x609756/f8bc4090-676b-44ee-b7ff-5ffa6c8c2a70/Q2FY13_Earnings%20Release_FINAL_withPressTables.pdf)

so their actually doing better.

If I have an orange business and I sell my orange farm which increases my cash reserves I don't claim a profit because I have more money at the end of that year than I did the previous.

NET WORTH determines business value, not what is sitting in their bank account. The business is worth less than it was at the same time in the previous year. That is a BAD thing and it makes them look bad in front of shareholders.

Guys, this is a tiny hiccup for EA. Don't start digging their coffin hole just yet.

For crissakes they've still got Madden. HOW that sells so much each year I don't understand, but the point remains that it does.

EA's not going the way of THQ. They're pretty much here to stay.

I don't want to see anyone lose their jobs, but EA -really- needs to make some changes in how they treat their customers if they expert to right their sinking ship.

ShirowShirow:
EA's not going the way of THQ.

One can hope though... One can only hope.

It probably wont happen, yeah... but it's nice to think it will.

Genocidicles:

ShirowShirow:
EA's not going the way of THQ.

One can hope though... One can only hope.

It probably wont happen, yeah... but it's nice to think it will.

And put a bunch of talented people out of bisness?

But have they learned anything?

If I had to condense my frustration with EA down to one phrase, it would be that they've created a corporate culture that seems to despise its own consumers, actively working to ignore any feedback players of their games give them (or at least, to seem as though they do.)

Now that "We know what we're doing, stop talking" mentality seems to stretch to financial reports as well, and it seems like the most they're likely to take away is to stop making games like Warfighter. Well, duh. Did you notice that the built-in fanbase for a Syndicate game was actively against turning it into an FPS? Has it come to your attention that the audience for SimCity is not clamoring for a mandatory social experience? Has it occurred to you that every whisper of resurrecting Ultima (sans Richard Garriott) is another nail in a once-great series's coffin? Have you noticed that every time someone like DeMartini opens their mouth in public, people start reaching for torches and pitchforks?

EA made some great games; hell, I'll admit they still make some great games. But every dollar spent on them is a vote for them continuing their run of self-destructive, consumer-despising idiocy.

harryhenry:
And put a bunch of talented people out of bisness?

Serves them right for repeatedly shitting on their customers.

Well folks, welcome to year six of the three year turn around.

How is John 'make money by aggression' Riccitiello still not fired?

And there was much rejoicing.

EA, its not the economy, its cause you're the most bloated, wasteful, unabashedly evil publisher on the planet.

And as far as the people crying "Think of the people who will lose their jobs." I'm sorry, but when a company does unethical, anti-consumer, exploitative, sleazy shit and puts out sub-par product we can't just let it slide because jobs are on the line.

I wonder how many "Think of the employees" people are the same people that want to shut down the fire-arm industry and want wal-mart gone. Ya know those places employ people to, right? Way, WAY more people than EA.

Eclipse Dragon:
Oh EA one moment people agree with you, the same day they return to wishing for your doom.

Yep, we agree with EA that blaming violence on games is stupid and I'll praise EA for opposing DOMA.. but EA was also walking in lock-step with SOPA, ACTA and any other mass censorship bill that would give them more control over internet and has been a pioneer in making exploitative, anti-consumer business practices.

GAunderrated:
"The economy hasn't gotten any stronger," EA Chief Financial Officer Blake Jorgensen told Reuters. "It's a little early for me to know how strong the market's going to be, so based on that we widened our range for revenue for the fourth quarter and brought our guidance down slightly just to make sure we're prudent."

Wrong the market is as strong as ever Blake, its just you guys are making crap games and bad business practices that people want no part in. You can blame it on the economy, the community, the media, everything but what you are doing wrong.

You are right the economy is just as strong as the last few years which means its still crap. EA has already admitted what they did wrong which was warfighter. Other then that they have not actually done anything wrong and even that was just misjudging their audience.

harryhenry:

Genocidicles:

ShirowShirow:
EA's not going the way of THQ.

One can hope though... One can only hope.

It probably wont happen, yeah... but it's nice to think it will.

And put a bunch of talented people out of bisness?

They work for the enemy!

Tbh I don't want EA to go under, I want EA to learn from their mistakes. That would be better for everyone involved.

I wish they would tank if only so someone could buy them and install some competent management....

I like a lot of EA stuff and don't subscribe to the "EA is pure evil" line of thinking. My main issue is that it is run by fucking idiots.

harryhenry:

Genocidicles:

ShirowShirow:
EA's not going the way of THQ.

One can hope though... One can only hope.

It probably wont happen, yeah... but it's nice to think it will.

And put a bunch of talented people out of bisness?

You mean the good folks at Westwood, Bullfrog, Origin, Pandemic... Oh wait.

http://www.destructoid.com/ea-admits-it-blew-it-with-bullfrog-origin-and-westwood-69491.phtml

Yeah, EA isn't really known for its talent. Its more regarded as a place where talent goes to die.

On one hand it's a bit hard for me to really stand up and applaud and cheer when a company like EA starts to lose a lot of money, simply because it means that people who had nothing to do with the financial decisions will likely get laid off or their benefits/pay cut so they can continue to prop up the farce of the company. On the other hand, maybe it will finally force them to stop screwing around with their customers. Maybe. Possibly. Hopefully. In my dreams.

They are still in the positives over all though, which is the problem, I cant wait till they report a loss for the whole year.

I think all of us (most anyway) here can agree that the piss-poor performance that was Warfighter sales was due, not in fact to a poor economy, but to a piss-poor GAME.

EA, your game was garbage. The marketing was junk. You insulted the FPS community by putting it out, period. Better luck next time.

If there IS a next time.

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