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EA Posts $16 Million Loss, Looks to Next-Gen Games

Posted by Zonk on from the big-get-smaller dept.

kukyfrope writes "Electronic Arts recently released its preliminary financial results for the fourth quarter and fiscal year ended March 31, 2006. While net revenue was up 16 percent to $641 million for the fourth quarter, the leading video game publisher suffered a net loss of $16 million. During the same period last year EA posted net income of $8 million. 'We are well into the console transition and now have more than 30 next generation games in development,' said Warren Jenson, Chief Financial and Administrative Officer."

6 of 85 comments (clear)

  1. Contributors by Kelz · · Score: 4, Insightful

    A couple factors probably contributed to this:

    The lack of an established next-gen console: The X360 had shortages across the board from manufacturing, and EA didn't have enough launch titles. People with the system bought a very high percentage of the games that were availible, but EA didn't have enough to really take advantage of that.

    The labor lawsuit. The settlement probably put them back quite a bit, as well as hurting their "efficiency" by having to let developers work less hours, and paying for the settlement.

    1. Re:Contributors by CastrTroy · · Score: 3, Insightful

      I think it has more to do with the quality of games produced. They can't expect to make money year after year releasing Madden, NHL games, and Movie spinoffs which don't really bring anything new to the gaming world.

      --

      Anthropic principle: We see the universe the way it is because if it were different we would not be here to see it.
  2. I say it's pirates! by whoop · · Score: 3, Funny

    It must be 'cause of them rascally pirates!!

  3. That's strange... by dalmiroy2k · · Score: 3, Informative

    I readed the article and they don't seem to blame piracy about their loses...

  4. 30 games by payndz · · Score: 4, Funny
    We are well into the console transition and now have more than 30 next generation games in development

    Madden 2007, Madden 2008, Madden 2009, Madden 2010, Madden 2011...

    --
    You must think in Russian.
  5. Re:Profit. Loss. So what? by hambonewilkins · · Score: 3, Interesting
    I agree. And even worse is attention focused on earnings per share (EPS). Both factors the company can completely tweak at will, in a way. Revenue and growth in revenue is far, far more important.

    For example, lets say halfway through the quarter EA realizes its R&D costs are way too high and that their profits will be lower because of it. If investors are all jazzed about profit/loss, they could fire their work force or stop R&D in order to show a profit.

    It's a relatively meaningless number unless, as was stated, it is a long trend of losses or it was completely unexpected (and without a decent explanation).

    --

    God Bless America. Why? Did it sneeze?