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Forums - Sales Discussion - Electronic Arts reports $391 million loss, plans to cut 1,500 jobs

NJ5 on 10 November 2009

According to their conference call, they cancelled a third of the upcoming games:

http://seekingalpha.com/article/172343-electronic-arts-f2q10-qtr-end-9-30-09-earnings-call-transcript?page=-1

Sean MacGowan - Needham & Company

Thank you. I was wondering if you could be a little bit more specific about where, what areas we would see the reduction in titles -- are you pushing that genre wise or particular types of games?

John S. Riccitiello

We sort of thought about how we would answer that question on the call and we were going to tell you about the just over a dozen unannounced titles we were cutting but that seemed to be challenging in the way of communication because we haven’t previously communicated to you which they were.

I think the better way to look at it would be that Electronic Arts has a core slate of games label and sports franchises that we will iterate on a either annual or bi-annual basis. And I think you know what those major titles are -- all of them are selling or have sold in their most recent edition 2 million units or more. After that, we’ve got The Sims and Hasbro, and frankly anything that doesn’t measure up to looking like it can pencil out to be in very high profit contributor and high unit seller got cut from our title slate from this point going forward.

So it is really, in a way, if you could array our title slate up knowing what we did about what we would have otherwise brought to market, we cut the bottom third of it.

 



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

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heruamon on 10 November 2009

Left4Dead2 isn't a EA game, they are the publisher, not the onwers of the IP.  Somewhat like M$ published Mass Effect, and then offered back the publishing rights to EA for ME2 to allow them to keep the game exclusive to the 360 on consoles.

EA is in EXTREMELY vunerable at this point, and imho, I think we might seem some shake-ups on the gaming landscape in the near future.



"...You can't kill ideas with a sword, and you can't sink belief structures with a broadside. You defeat them by making them change..."

- From By Schism Rent Asunder

Rainbird on 10 November 2009
MontanaHatchet said:
Nintendo and Electronic Arts are the two biggest publishers in the business (well, Activision may be bigger than EA now, but I'm not sure), and I think they've both taught us something very important.

Never listen to what gamers say.

Activision Blizzard beat EA right from when the merger happened. And I can see your point relative to Nintendo and EA, but what about Activision?



heruamon on 10 November 2009

Well...seems like Activision-Blizzard is a gem of a company in this industry.



"...You can't kill ideas with a sword, and you can't sink belief structures with a broadside. You defeat them by making them change..."

- From By Schism Rent Asunder

jarrod on 10 November 2009
Grimes said:
I think they've mismanaged Rock Band horrendously. From overpaying for the Beatles to ignoring the Wii. It's a great game, but it should have easily beat GH. I think they've squandered a billion dollars on Rock Band alone.

EA's not really in control of Rock Band since it's an EA Partners project, that's more up to MTV/Harmonix.  And yeah, it's been badly handled, from the hollow "platform" PR to Wii neglect to overpricing.



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TheSource on 10 November 2009

If I was John R, I'd be looking into converting more of the female base on Wii into EA gamers. EA Sports Active is the one breakout title the company has had on the Wii that wasn't previously established on another system - and it was primarily targetted to women. Boom Blox has done ok for a new IP, and Tiger Woods has done well - but it was established on other systems first.

I don't know that excercise is the answer necessarily, but I'm sure EA could pull off a a strong Cheerleading title or something for Wii - Namco-Bandai had reported several months ago that its We Cheer had shipped over a million units on the Wii.

Breakdancing with some kind of powermat and/or using the balance board would probably work fairly well too. But the least competitve market in respects is games on Wii not involving excercise that are targetted at women - and I think EA as a sports brand needs to figure out how to find a way to tap that audience.

 



People are difficult to govern because they have too much knowledge.

When there are more laws, there are more criminals.

- Lao Tzu

theprof00 on 10 November 2009

An EA buyout may be closer than it first seemed.



KillerMan on 10 November 2009
heruamon said:
Well...seems like Activision-Blizzard is a gem of a company in this industry.

Though without WoW ActivisionBlizzard would have probably posted similar losses. Both companies have some serious money hole and I really don't know what.



heruamon on 10 November 2009
KillerMan said:
heruamon said:
Well...seems like Activision-Blizzard is a gem of a company in this industry.

Though without WoW ActivisionBlizzard would have probably posted similar losses. Both companies have some serious money hole and I really don't know what.

Lol...without the Core2 chipset, Intel would be in trouble...without Windows, M$ would be in trouble...etc, etc.  WoW is one product in ATVI's portfolio...a profitable one, but MW2 is going to deliver some serious dough this qtr...it's all about managing your resources, which EA does a poor job of doing.  A $2-3 billion sale of some assets to M$ is looking more and more possible with each passing day.  I'm sure M$ is looking at the WoW-like potential in Old Republic, and thinking of a limited acquisition of some EA firms.



"...You can't kill ideas with a sword, and you can't sink belief structures with a broadside. You defeat them by making them change..."

- From By Schism Rent Asunder

MontanaHatchet on 10 November 2009
Rainbird said:
MontanaHatchet said:
Nintendo and Electronic Arts are the two biggest publishers in the business (well, Activision may be bigger than EA now, but I'm not sure), and I think they've both taught us something very important.

Never listen to what gamers say.

Activision Blizzard beat EA right from when the merger happened. And I can see your point relative to Nintendo and EA, but what about Activision?

Activision whores out their series and has no respect for videogames as a whole. They are the perfect new EA.