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27 EA games last year went platinum, 15 went double platinum

In one of the biggest years ever in gaming, Electronic Arts posted a $454 million net loss in its fiscal 2008. That may come as a bit of a surprise, given that 27 of EA’s titles this year sold more than 1 million units, and 15 that sold more than 2 million.

In fiscal 2007, EA had 24 titles that surpassed the million mark, but managed a net income of $76 million. That’s not to say that EA just finished a bad year – far from it, as the games maker reported a net revenue of $3.665 billion in fiscal year ended March 31, 2008, up 19 percent as compared with $3.091 billion for the prior year.

In fact, the past fourth quarter was a record setting one, with sales up 84 percent to an impressive $1.13 billion. The record period was driven by PlayStation 3 and Xbox 360 cross-platform titles Burnout Paradise, Army of Two and Rock Band. Despite that, net loss for the quarter was $94 million as compared with a net loss of $25 million for the prior year.

The cause for the loss can be partly attributed to the acquisition of game development studios BioWare Corp. and Pandemic Studios in a deal worth $860 million. Though not exactly of the same acquisition type, EA managed to lure former top Microsoft executive Peter Moore away from the Xbox business to helm EA Sports.

It’s clear that EA’s not finished in growing its family just yet. The massive game publisher recently borrowed $1 billion from Morgan Stanley and other lenders to help finance a possible acquisition of Take-Two Interactive.

EA also had other victories during the year, including it claiming itself the number one publisher across all platforms in North America with 19 percent share and in Europe with 20 percent share. The Sims franchise surpassed the 100 million copies sold milestone, with plenty more on the way. EA also secured exclusive rights from Hasbro to create games based upon intellectual properties including Monopoly, Scrabble, Yahtzee, Nerf, Tonka and Littlest Pet Shop.

EA CEO John Riccitiello earlier this year said publically that it’s his aim to improve the management of work environment of the company’s developers and other employees. In the recent financial report, EA revealed that a December 2007 employee satisfaction survey showed significant improvement over the last appraisal in 2004. Results included a double-digit gain in employee engagement.

"A year ago, we committed to an aggressive change agenda at EA. Our employees stepped up to the challenge and we finished fiscal year 2008 with non-GAAP revenue up 30% to $4 billion – a record for any third-party publisher. Our operating margins were flat to our prior year. On balance, we're very pleased with our revenue growth, but not yet happy with our profit margins," said Riccitiello. "In fiscal 2009, we expect to deliver another $1 billion in revenue growth and to double our operating profit on the strength of our slate of titles."



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RE: EA is Huge...
By killerroach on 5/14/2008 11:44:33 AM , Rating: 0
I dunno... I see most of these publishers as just more of the same. If anything, Activision does a lot of the stuff that EA normally gets hammered over ("safe" projects, heavy-handed control of internal studios, perpetual pimping of certain key franchises), without any of the negative backlash. So, in my opinion, either Activision's getting off light or EA's getting a raw deal. Not quite sure which one it is, but I'm thinking it's a little bit of both.

The question will be how long EA actually decides to continue with their so-called "new direction"... it has the potential to reap dividends in terms of both revenues and game quality, but the question will definitely be one of whether or not EA has the corporate will necessary to overcome these growing pains.

To me, though, making value judgments about the various game publishers is like making said judgments about the major film studios. They're all soulless, faceless, behaving the same, and come out with eerily similar, bland, tepid product.


RE: EA is Huge...
By KernD on 5/14/2008 12:14:13 PM , Rating: 3
quote:
heavy-handed control of internal studios


Do you work for Activision? I do, and thats just not true, Activision's business model with it's studios is not like that. Our studio boss leads the studio, not some guy back at the HQ.


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