hot  /  reviews  /  videos  /  cblogs  /  qposts

EA cuts jobs, scraps over a dozen game projects

9:30 PM on 11.09.2009 // Hamza CTZ Aziz

On the heels of today's announcement that Electronic Arts acquired social games developer Playfish comes some bad news. EA has cut 1,500 positions spanning multiple studios such as Redwood Shores, Black Box, Tiburon and Mythic. A press release from EA states that 1,300 of those layoffs are part of a restructuring plan that will also see the closure of several facilities.

The cuts will cost EA between $130 million and $150 million and will be completed by March 31, 2010. EA should see an annual savings of about $100 million from these cuts. Hit the break to get a look at lowdown on EAs earning and losses for those of you interested in the business side of gaming.

On top of the job cuts today, EA's John Schappert revealed during a conference call that over a dozen unannounced EA titles have been cut from production. Schappert wouldn't reveal what the games were but it can't be any more heart breaking than when we found out that Road Rash and Mutant League were canceled. I wonder if The Ripper was part of the cuts too.

REDWOOD CITY, Calif., Nov 09, 2009 (BUSINESS WIRE) — Electronic Arts Inc. (NASDAQ:ERTS) today announced preliminary financial results for its second quarter ended September 30, 2009.

Fiscal Second Quarter Results (comparisons are to the quarter ended September 30, 2008)

GAAP net revenue for the quarter, which includes the impact of deferred net revenue adjustments, was $788 million as compared with $894 million for the prior year. During the quarter, EA had a net revenue deferral of $359 million related to certain online-enabled packaged goods and digital content as compared with $232 million in the second quarter of the prior year.

Non-GAAP net revenue for the quarter was a record $1.147 billion, up 2 percent as compared with $1.126 billion for the prior year. Revenues were above street expectations. Sales were driven by the launches of FIFA 10, Madden NFL 10, The Beatles(TM): Rock Band(R), Need for Speed(TM) SHIFT and NCAA Football 10.

GAAP net loss for the quarter, including the impact of deferred net revenue, was $391 million as compared with a net loss of $310 million for the prior year. GAAP diluted loss per share was $1.21 as compared with GAAP diluted loss per share of $0.97 for the prior year.

Non-GAAP net income was $19 million as compared with a non-GAAP net loss of $20 million a year ago. Non-GAAP diluted earnings per share was $0.06 as compared with a non-GAAP diluted loss per share of $0.06 for the prior year.

“EA is performing well, with quality, sales and segment share up so far this year,” said John Riccitiello, Chief Executive Officer. “We are making tough calls to cut cost in targeted areas and investing more in our biggest games and digital businesses.”

“We met our second quarter expectations and delivered a record quarter for revenue,” said Eric Brown, Chief Financial Officer. “Today we are announcing a significant cut in our operating expenses and the acquisition of a leader in social games, Playfish.”

EA was the #1 publisher in North America and Europe fiscal year to date, with 21% segment share – up four points. EA had four of the top-ten games in both North America and Europe.

Business Outlook

The following forward-looking statements, as well as those made above, reflect expectations as of November 9, 2009. Results may be materially different and are affected by many factors, including: development delays on EA’s products; competition in the industry; the health of the economy in the U.S. and abroad and the related impact on discretionary consumer spending; changes in anticipated costs; expected savings and impact on EA’s operations of the Company’s cost reduction plan; consumer demand for console hardware and the ability of the console manufacturers to produce an adequate supply of consoles to meet that demand; changes in foreign exchange rates; the financial impact of the Playfish acquisition and potential future acquisitions by EA; the popular appeal of EA’s products; EA’s effective tax rate; and other factors detailed in this release and in EA’s annual and quarterly SEC filings.

Fiscal Year Expectations – Ending March 31, 2010

GAAP net revenue is expected to be between $3.6 and $3.9 billion.

Non-GAAP net revenue is expected to be approximately $4.2 to $4.4 billion.

GAAP diluted loss per share is expected to be between $1.20 and $2.05.

Non-GAAP diluted earnings per share is expected to be between $0.70 and $1.00 and EA expects to be profitable in both Q3 and Q4.

For purposes of calculating fiscal year 2010 GAAP loss per share, the Company estimates a share count of 324 million and for non-GAAP EPS, the Company estimates a share count of 326 million.

Expected non-GAAP net income excludes the following items from expected GAAP net income:

$500 to $600 million for the impact of the change in deferred net revenue (packaged goods and digital content);

$170 to $175 million of estimated stock-based compensation;

$55 million of amortization of intangible assets;

$120 to $145 million of restructuring charges;

$24 million of losses on strategic investments;

$14 million loss on lease obligation; and

($120) to ($170) million in the difference between the Company’s GAAP and non-GAAP tax expenses.

The above fiscal 2010 expectations do not reflect the financial impact of the acquisition of Playfish Limited, which is expected to be roughly neutral to non-GAAP expectations and increase GAAP loss per share by $0.15 to $0.25, due primarily to acquisition-related tax expenses, deferred revenue adjustments, additional stock-based compensation, and amortization of intangible assets. These preliminary estimates are based on currently available information and are subject to change.

 Setup email comments

Unsavory comments? Please report harassment, spam, and hate speech to our moderators, and flag the user (we will ban users dishing bad karma). Can't see comments? Apps like Avast or browser extensions can cause it. You can fix it by adding * to your whitelists.

Status updates from C-bloggers

IDrawOnTape avatarIDrawOnTape
If I was to play through the NES library, besides being madness, what order do I do it? Alphabetically or Release date-wise? Whats the Dtoid universe think?
Gundy avatarGundy
Maybe someday I'll finish Natural Doctrine AKA Natty Doc...
Niero Desu avatarNiero Desu
You've got guts, a powerful soul You've got guts, sweet and sour You've got guts, do the guts A man sweats, he really does, go!
Flegma avatarFlegma
Finished Xenoblade Chronicles for the first time in about 107 hours. Got tired of attempting to clear as many sidequests as there were left available. Maybe in NG+...
techsupport avatartechsupport
Woah. I consider myself a nerd and all, but the trophy hunting community is next level. Is there a biopic about the people at the top of these leaderboards? I'd find that very interesting.
Paul S avatarPaul S
GeoHolmes [img][/img]
Mr Knives avatarMr Knives
I have no idea what this game is about but if this isn't the best goddamn cover art ever, I don't know what is. [url=][img][/img][/url]
RadicalYoseph avatarRadicalYoseph
Shinta avatarShinta
Xenoblade X limited edition on Amaxon now. Will probably sell out very fast like usual.
BaronVonSnakPak avatarBaronVonSnakPak
Just got a Vita with a 16GB card for super cheap. What games should I be looking out for?
RadicalYoseph avatarRadicalYoseph
So the XCX Special Edition was marked as in stock for 20 seconds and I got a copy! I am disproportionately excited considering what it comes with. Hopefully the art book and packaging are high quality. WOOOOOOOOO!!!!!
RadicalYoseph avatarRadicalYoseph
Surprise, Xenoblade Chronicles X Special Edition has already sold out on Amazon.
Solar Pony Django avatarSolar Pony Django
Just a heads up, the Xenoblade Chronicles X Special Edition is up for preorder on Amazon. I think it'll be available elsewhere but you know. Nintendo. Love em but hard to find.
Clicks Clacks avatarClicks Clacks
Picked up Valkyria Chronicles for $5 in the Humble Store, figure I'd advertise that for anyone that doesn't have it yet. Sale ends in less than 42 hours after this post yo.
gajknight avatargajknight
My copy of National Geographic came today. Best subscription I've paid for, worth it for the lovely pictures alone. This one has a story about elephant poachers and ivory tusks with spy chips in 'em. James Bond shit man.
OverlordZetta avatarOverlordZetta
If someone used the blog reply feature to just divide a somewhat long blog into easier-to-digest chapters that could be consumed at the leisure of readers, would that be kosher?
FlanxLycanth avatarFlanxLycanth
RadicalYoseph avatarRadicalYoseph
@Barry Kelly It looks like it will get pretty difficult later on. It even has instafail stealth sections according to @Chris Carter #neededanexcuse to #tryouttheatfeature
Barry Kelly avatarBarry Kelly
I hope MGS V manages to have some sort of challenge to it. I just replayed MGS 4 for the first time since release and wow that game just practically plays itself. And that's outside of the long sections it is playing itself!
Agent9 avatarAgent9
Splatfest Decipticons, Let us crush the Autobot menace [img][/img]
more quickposts



Invert site colors

  Dark Theme
  Light Theme

Destructoid means family.
Living the dream, since 2006

Pssst. konami code + enter

modernmethod logo

Back to Top

We follow moms on   Facebook  and   Twitter
  Light Theme      Dark Theme
Pssst. Konami Code + Enter!
You may remix stuff our site under creative commons w/@
- Destructoid means family. Living the dream, since 2006 -