Electronic Arts: restructuring company to address revenue loss
Despite an 18% loss in revenue last quarter as compared to last year’s, Electronic Arts is confident the launch of a number of holiday titles and an upcoming restructuring would put them back in the game. The changes will focus on efficiency and cost-cutting. Wedbush Morgan’s Michael Pachter remains positive about the future of the studio, saying: “They appear to have costs under control and revenue growth is solid.”
Despite an 18% loss in revenue last quarter as compared to last year’s, Electronic Arts is confident the launch of a number of holiday titles and an upcoming restructuring would put them back in the game. The changes will focus on efficiency and cost-cutting.
Part of EA’s losses were due to changes in how they charge for some of their online games. Their major games did very well in the market, though: Madden NFL 08, FIFA 08, NCAA Football 08, Tiger Woods PGA Tour 08 and MySims each sold a million copies and were the driving factor in sales.
This holiday season we’ll be seeing ten new titles that are all expected to do well in the market: The Simpsons Game, Need for Speed Pro Street, Hellgate: London, Rock Band, NBA Live 08, SimCity Societies and Crysis. Some of these games cut across most, if not all, the major platforms. No doubt, EA will do very well for the holidays.
To improve revenue, EA will also be doing some heavy reorganizing. They’ll be closing their Chertsey Facility in England. Some employees will either be moved or laid off. Michael Pachter of Wedbush Morgan, who also supported EA’s decision to purchase Bioware and Pandemic Studios, remains positive about the future of the studio, saying: “They’ve made tons of progress. They appear to have costs under control and revenue growth is solid. They made all the right comments about cost-cutting.”
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