Electronic Arts looking to game release after Q3 loss
Electronic Arts hopes this week’s launch of “Dante’s Inferno” will give the company a new franchise to exploit with sequels for years to come and help the videogame publisher get out of a hellish financial situation.
The company reported a 25% drop in revenue to $1.2 billion and a loss of $82 million during the EA’s third fiscal quarter ended Dec. 31.
The numbers are significant considering the videogame industry typically sells more titles during the holidays than at any other period during the year. EA is the second-largest gamemaker behind Activision Blizzard, which will report its earnings Wednesday.
The industry was hit by an 8% slump in overall vidgame sales last year, and most companies have attempted to slash operating expenses to offset losses.
EA’s numbers included $100 million in restructuring charges. It has been actively looking to cut costs, laying off a significant number of staffers and producing fewer games.
In fact, EA released fewer games during the quarter than a year earlier but was able to reduce its losses from $641 million in the earlier frame.
Its top sellers included “Dragon Age: Origins,” “Left 4 Dead 2,” “FIFA 10,” “Madden NFL 10” and “The Sims 3.”
EA has been struggling for some time, and analysts have long said the company could be in play to be taken over by candidates, including Disney or Warner Bros., which have been building their inhouse videogame units through acquisitions.
Interest in “Dante’s Inferno” is said to be strong but the game faces stiff competition against Sony’s highly anticipated “God of War III,” bowing next month.
EA did have a big win with the release of “Mass Effect 2,” which sold more than 2 million units in its first week of release last month. But the company is lowering sales expectations for the rest of the year.
That didn’t sit well with investors, sending shares down more than 8% in after-hours trading.