With highly successful games like Madden and Spore, I would've thought EA would make a huge profit.. What's with the layoffs? What's with the 300+ million dollar loss? I don't get it...

Sales haven't increased from last generation, but game budgets have due to the demand for better graphics.

They cancelled Tiberium so they lost money from that. The next Harry Potter game was delayed till next year which brings them in a good sum of $$ this quarter. Facebreaker was a total dud.  Stuff like that for the most part

I think they have also spent a lot of money on improving their studios, which is why we are getting such good games this christmas. FIFA 09 and Need for Speed in particular should bring them tons of money, both games that have only taken a year, and the former should sell about 9m and Need for Speed will likely sell 5m

I think their problem is that neither console has really made up for the decline in PS2 software sales, especially as their games don't seem to be selling that well on Wii, but I am sure they will publish a profit next quarter. I am still a little perplexed though