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Print 23 comment(s) - last by warun.. on May 13 at 12:31 PM

EA says $16 million in operating expenses are due to restructuring costs

Things haven't been going all that well over at Electronic Arts. Despite being one of the biggest companies in the gaming industry, EA has been struggling with profitability. The profitability struggles led the company to shed employees over the last several months.

During its investor call this week, EA confirmed that it let about 900 workers go during its organizational restructuring process. EA also confirmed that the layoffs cost company about $16 million in the short term.
 
EA's Blake Jorgensen noted during the call that EA had $540 million in operating expenses for the current fiscal quarter. That figure is $15 million higher than the company had expected due to those costs associated with operational expense reducing actions, including layoffs. Some of the extra expense also came from the resignation of EA's CEO John Riccitiello back in March.

Jorgensen also noted that EA's plan for cost reductions would "reduce our overall headcount by approximately 10%." EA previously laid off the entire staff in its Montréal game studio.
 
EA was also gifted with the worst company award for the second year in a row last month. That award was bestowed on EA from The Consumerist.

Much of the blame for EA winning the dubious distinction of the worst company for the second year in a row was blamed on the online server disaster that happened with the company's popular game SimCity. Gaming servers that were overloaded prevented many people who purchase that game from being able to play, sometimes for days.

Source: Polygon



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Hopefully...
By sh3rules on 5/9/2013 10:16:37 AM , Rating: 5
...EA will become a good company or they will vanish (I can dream, can't I?)




RE: Hopefully...
By inperfectdarkness on 5/9/2013 10:28:51 AM , Rating: 5
EA can't die soon enough.


RE: Hopefully...
By techxx on 5/9/2013 10:37:13 AM , Rating: 4
Since EA probably won't be leaving anytime soon, how about just wiping out the current executive board and replacing it with talented people who have brains?


RE: Hopefully...
By GulWestfale on 5/9/2013 11:12:48 AM , Rating: 3
or maybe just replace them with people who care about video games? and about their customers?


RE: Hopefully...
By FITCamaro on 5/9/2013 11:31:37 AM , Rating: 2
I'll work for probably 25% of some of those guys.


RE: Hopefully...
By Skywalker123 on 5/11/2013 5:17:06 PM , Rating: 2
that'd be a big raise from your minimum wage job


RE: Hopefully...
By One43637 on 5/9/2013 12:48:02 PM , Rating: 2
For me it was hard to imagine that in large gaming companies, there are very little gamers in a position to influence/direct/guide how they operate and create games.

Yet, this is exactly what it's like at a friend's office. No gamers to fight and make decisions for gamers.


RE: Hopefully...
By someguy123 on 5/9/2013 5:07:56 PM , Rating: 2
You could replace them with talentless hacks as long as they're docile and complacent and come out with a better run company. EA execs are insanely anticonsumer and egotistical. It's like they exist to make sure none of their games are successful.

quote:
Many continue to claim the Always-On function in SimCity is a DRM scheme. It’s not. People still want to argue about it. We can’t be any clearer – it’s not. Period.


quote:
In the past year, we have received thousands of emails and postcards protesting against EA for allowing players to create LGBT characters in our games. This week, we’re seeing posts on conservative web sites urging people to protest our LGBT policy by voting EA the Worst Company in America.


-Peter Moore


Lay off executives, not the employees
By techxx on 5/9/2013 10:54:30 AM , Rating: 4
Somebody PLEASE get this company some new leadership.




RE: Lay off executives, not the employees
By paradoxe on 5/9/2013 12:01:11 PM , Rating: 2
It's shedding employees to reduce cost but buying exclusive rights from Disney for the SW games. There's something wrong w/ this company.


RE: Lay off executives, not the employees
By lagomorpha on 5/9/2013 12:27:13 PM , Rating: 4
EA caters to a different market than most video game companies. You see, most companies sell games that people want to play because doing so is enjoyable. EA targets the market of 'games that have a famous enough license that people will buy them no matter how terrible they are'.

The less money they spend on writers, artists, and programmers, the more money they can spend buying licenses. It's like watching movies based on video games - it's more profitable to produce them cheaply because making them good won't significantly increase the audience size.


RE: Lay off executives, not the employees
By Motoman on 5/9/2013 2:02:48 PM , Rating: 2
I am so glad I have no desire to play a video football game.


RE: Lay off executives, not the employees
By lagomorpha on 5/9/2013 2:44:33 PM , Rating: 2
What surprises me is they havn't yet made a football MMO where you pay a monthly fee to play it and updates are sent as teams trade players irl.

It would be a godawful game but would make a lot of money.


By piroroadkill on 5/10/2013 5:36:08 AM , Rating: 2
That's actually a fantastic idea. I'd say make it free to play with microtransactions - trading players, buying better grounds/staff...

I loathe football, but there's no doubt somebody would play it. After all, there are people who actually enjoy playing things like Football Manager..


Yes and no
By Motoman on 5/9/2013 10:21:19 AM , Rating: 5
quote:
...online server disaster that happened with the company's popular game SimCity. Gaming servers that were overloaded prevented many people who purchase that game from being able to play, sometimes for days


That was part of it - the actual root issue is that they require the always-on DRM in the first place.




RE: Yes and no
By karielash on 5/9/2013 10:49:06 AM , Rating: 2


The actual root cause is that EA are a bunch of total douchebags to their customers....


RE: Yes and no
By StevoLincolnite on 5/9/2013 6:09:13 PM , Rating: 1
EA = Executive Assholes.


Layoffs
By drlumen on 5/9/2013 1:55:31 PM , Rating: 2
I feel sorry for the people that have been laid off when the real issue is likely due to middle and upper management screw ups.

For example, with the SimsCity fiasco, it was not the developers decision to make it online only and for all the DRM. Likewise, I would guess that the developers tried to push for more servers and bandwidth but a manager somewhere, trying to cut costs, tried to squeak by with (less than) the minimum amount of servers.

But, at the end of the day, it's mostly programmers and artists that get laid off.




RE: Layoffs
By Reclaimer77 on 5/10/2013 8:09:38 AM , Rating: 2
quote:
For example, with the SimsCity fiasco, it was not the developers decision to make it online only and for all the DRM.


Lots of games are online only and don't suffer SimCity styled issues, if any at all. Sorry but you can blame management all you want, but whoever was in charge of setting up and deploying those servers absolutely deserves to be fired. It was one of the worst game launches in history.

You know as a gamer I understand the EA hate, but a lot of it goes way too far.


RE: Layoffs
By warun on 5/13/2013 12:29:38 PM , Rating: 2
Actually it wasn't even the guy who set up the servers, it's(again) the suits: they actually thought consumers like nothing more than military shooters/plain racing/football/shooting so they didn't think they'd have to set up many servers for simcity; the lead designer for SimCity herself said that they didn't think so many people would buy it hence the server over capacity.


Compensation
By wallijonn on 5/10/2013 12:38:12 PM , Rating: 2
quote:
That figure is $15 million higher than the company had expected due to those costs associated with operational expense reducing actions, including layoffs. Some of the extra expense also came from the resignation of EA's CEO John Riccitiello back in March.


Baloney. It's all because of the CEO parachute compensation package - 2x his salary ($9.5M last year) and the signing bonus for the incoming CEO.




Grrr
By Regs on 5/10/2013 3:23:13 PM , Rating: 2
The little people are getting screwed by greedy bastard leaderships mistakes. I swear, their marketing director must double as North Korea's food czar.




I can do a better job
By warun on 5/13/2013 12:31:14 PM , Rating: 2
heck, I can do a better job than those suits; Gabe Newell can vouch for me.




"So, I think the same thing of the music industry. They can't say that they're losing money, you know what I'm saying. They just probably don't have the same surplus that they had." -- Wu-Tang Clan founder RZA














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