While EA’s actual revenue increased by ten percent over the same period in the previous year, their operation costs sky rocketed. The same time in the previous year, EA registered $33million in losses.
The company registered $1.65billion in sales revenue, plus $88million in online revenue. While growth was attained in this department, it did not meet analysts’ expectations. The company overextended itself in terms of gross expenditure, and failed to make it up in game sales.
Moving forward, EA are opting for a reductionist strategy. The company is shedding 11 percent of its workforce, a total of 1100 employees. It is also closing 12 of its facilities. We can expect around 30 percent less games releases from EA in the coming year compared to 2008.
The restructuring process is estimated to bring down operation expenses by around $500 million.
EA remains positive about the future however, reporting strong franchises such as FIFA, which sold 7.8 copies of the 2009 edition, and Need For Speed which managed 5.2 million Need for Speed: Undercover).
They also report 300000 paying subscribers playing Warhammer Online, contributing significant monthly revenue.
EA were proud to report that the quality of their games is on the up, with 13 titles scoring 80 or over on Metacritic.com in 2008.
Mirrors Edge and Dead Space also both sold in excess of 1 million copies in 2008, pretty much guarantying sequels over the next two years. Dead Space is already heading to the Nintendo Wii. This move is indicative of EA’s announced plans to target Nintendo’s console strongly this year.
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