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Forums - Sales Discussion - EA Posts Fiscal Q3 Net Loss of $641 million

FishyJoe on 03 February 2009

Godfather 2, Sims 3 and Dragon Age all delayed to fiscal 2010.



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FishyJoe on 03 February 2009

They need to hire a new web guy. Their link on the 3q fiscal release is pointing to the 2q. Sloppy, like the rest of their company.



HappySqurriel on 03 February 2009
Aiemond said:
HappySqurriel said:
Groucho said:
Despite the consoles having approximately equal marketshare, EA got 29% of its revenue from HD titles, and 11% from Wii titles.

Did EA have a 29:11 HD to Wii game ratio (or more like 29:14, thanks to individual unit costs)? Were the profit margins on Wii games so much higher than the HD games, that EA should just drop HD development altogether? Was it even higher at all? Does anyone have any real numbers to support these assumptions?

The Wii doesn't make EA as much revenue OR profit as the HDs -- if it did, EA would make a lot more Wii games, plain and simple. The "3rd parties make crap for the Wii" excuse is getting old. All of EA's AllPlay titles this past year were decent, yet their revenue stunk. Should EA just abandon their sports franchise staples altogether, and start making pool, pinball, etc. for the Wii masses, or do you think that's already covered a bit?

The attach rate is for 3rd party Wii titles is abysmal. Its *not* because they all "stink", either. The Wii sucks for 3rd party development, in all but a select few genres (i.e. casual), until proven otherwise, or until it outnumbers the HDs by a colossal margin.

 

How many Wii games had the development budget or marketing budget of Army of Two, Left 4 Dead, Dead Space, Burnout Paradise, Mercenaries 2 or Battlefield Bad Company?

Realistically, those games probably have 2 to 4 times the combined development and marketing budget of all Wii games released by EA to date ...

 

The wii games don't need the same budget as HD, what they need though, is the good teams working hard to make the best game possible. The nature of the wii makes it so that dev costs will be inherently lower. Now, for marketing, if they got even half that budget, DONE CORRECTLY, we would see a marked difference.

I don't disagree, I just think looking at revenue compared to userbase is a bad way to look at things ...

Games like Boom Blox, Smarty Pants, EA Playground, MySims, MySims Kingdom, Boogie, and Nerf N-Strike are games which are (probably) in the range of 10% the development cost of a game like Dead Space and its not like any of those games were heavily marketed.

 



darthdevidem01 on 03 February 2009

@fishy joe

Sims 3 will get EA back into profit



All hail the KING, Andrespetmonkey

FishyJoe on 03 February 2009

They spent $250 million on marketing vs $299 million for R&D.



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celine on 03 February 2009

BTW seems Dead Space is coming to Wii and EA Tennis game is time exclusive to Wii.
Also "Wii is the market leader--they're getting half of our emphasis in terms of SKU count."

EDIT:

http://twitter.com/ncroal



 “In the entertainment business, there are only heaven and hell, and nothing in between and as soon as our customers bore of our products, we will crash.”  Hiroshi Yamauchi

TAG:  Like a Yamauchi pimp slap delivered by Il Maelstrom; serving it up with style.

NJ5 on 03 February 2009

I think the article was updated, there are some more interesting things:

EA Chief Financial Officer Eric Brown told Reuters in an interview that the video game industry overall was doing well and that demand was good but concentrated on the best-selling titles.


EA expects to incur total restructuring charges, including severance and facility closures, of $65 million to $75 million, which will be recorded over the next 12 months.


I'm still wondering how restructuring and special items took them from a profit to a $641 million loss.



My Mario Kart Wii friend code: 2707-1866-0957

FishyJoe on 03 February 2009
NJ5 said:
I think the article was updated, there are some more interesting things:

EA Chief Financial Officer Eric Brown told Reuters in an interview that the video game industry overall was doing well and that demand was good but concentrated on the best-selling titles.


EA expects to incur total restructuring charges, including severance and facility closures, of $65 million to $75 million, which will be recorded over the next 12 months.


I'm still wondering how restructuring and special items took them from a profit to a $641 million loss.

 

One of the big expenses seems to be goodwill impairment, which I perhaps means they overvalued their assets and repriced them?



RPG on 03 February 2009

The real fuck up by EA was releasing Rock Band 2 late for the PS2 and especially the Wii, was not going to make then $641 million but still would have sold well. This is a real shame though as they made great games last year but it seems gamers do not want good games so with that said time for EA to milk some more franchises.

Oh almost forgot...............Mass Effect 2 360 EXCLUSIVE AMIRITE?!



 

celine on 03 February 2009

EA CEO John Riccitiello "excited" about new tennis game for Wii from EA's Sports Active line.

Uh !? is the "All Play" brand dead ?



 “In the entertainment business, there are only heaven and hell, and nothing in between and as soon as our customers bore of our products, we will crash.”  Hiroshi Yamauchi

TAG:  Like a Yamauchi pimp slap delivered by Il Maelstrom; serving it up with style.