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EA Deflects Buyout Rumors, Raises Profits, Sheds Jobs

Posted by simoniker on from the resistance-etc-etc dept.

Thanks to GamesIndustry.biz for its article discussing the quashing of rumors regarding media giant Viacom buying Electronic Arts, with Viacom chairman Sumner Redstone (also in the process of privately buying into Midway) saying: "We have looked at the obvious companies like Electronic Arts... but their price is so high, it would be dilutive to our earnings. We have ruled it out." Meanwhile, EA's annual financial report has been released, showing "net revenue for fiscal 2004 was $2,957.1 million, up 19.1 percent", and also confirming "an [in-progress] workforce reduction of approximately 117 personnel in development and administrative departments", following the closure/relocation of "the majority of our leased studio facility in Walnut Creek, California and our entire owned studio facility in Austin, Texas." The financials also note that rising online sales from casual gaming portal Pogo.com was "partially offset by a decrease in subscription net revenue from The Sims Online, Ultima Online, and Earth & Beyond subscription services."

3 of 18 comments (clear)

  1. Re:So much for innovation by Killjoy_NL · · Score: 3, Interesting

    There are a lot of gamestudios in Asia and recently some have popped up in Russia and the Tschech (sp?) republic.

    I think it won't be that much of a problem.

    --
    This is the sig that says NI (again)
  2. Studio Closures by a_peckover · · Score: 3, Interesting

    Should we be worried about the layoffs at Maxis and Origin ? It concerns me that EA keep buying out the studios they previously just acted as publishers for - Westwood is another good example, and then shutting them down or relocating their staff from Las Vegas to Los Angeles. While Command and Conquer Generals is a perfectly good RTS, it doesn't feel like a true C&C game. I can't see EA releasing any further GDI vs Nod or Red Alert based games any time soon.

  3. Re:Typical... by Andy+Mitchell · · Score: 3, Interesting

    Reducing staff numbers often has very little to do with hard economics and much more to do with sending a clear message to the city that we are serious about "controlling costs", "boosting profits" or some such.

    Take ARM for example, got rid of 10% of its staff because profits were down. Still making a profit and had a huge pile of cash in the bank.

    Lowered staff morale, reduced their ability to complete projects but the city liked it.