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EA's Quarterly Profits Down 31% 77

Posted by Zonk from the no-love-for-madden dept.
On the heels of announced layoffs, Electronic Arts reported reduced profits for the just-ended quarter. From the Gamespot article: "Whether the layoffs propped up EA's stock is debatable, as its share price lost over 2 percent of its value, $1.18. Trading was heavy indeed--twice normal volume, in fact, with 7.3 million shares changing hands. And no wonder: Shortly after the US markets closed, EA announced its earnings for its third fiscal quarter, which ran from October to December 2005. Besides being of great import to stockholders in the world's biggest third-party publisher, the report was seen by many as being a bellwether of the game industry's overall health."
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EA's Quarterly Profits Down 31% More

EA's Quarterly Profits Down 31%

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  • Fancy that (Score:5, Insightful)

    by el_womble ( 779715 ) on Friday February 03, 2006 @04:53AM (#14633449) Homepage
    So, selling upgrades as new products has finally been recognised by the general public, who are now tired of the EA tax every year?

    Thats one option. The other is that they just slashed the price of most of their PS2 and XBox titles in an effort to maintain sales during the transition to XBox 360 and PS3.

    The answer: stop working your staff into an early grave working on games that 10 years ago they wouldn't havae touched with a barge pole.

    The implemented solution will be to release John Madden 2008 and FIFA 2008 in the summer of 2006 for the XBox Spinning Top and PS4 for $200 in an attempt to gazump its competitors. There will of course be collatoral damage, and a new record will be set with a EA developer dying from stress and fatigue before he's even been conceived.
    • I read your post twice and I still can't figure out what you're saying.

      EA is not the only game company, so if staff is being worked "into an early grave" on games that "they wouldn't have touched with a barge pole" if they had a choice, why do they still work there? Midway, Activision, THQ, and MS Games are all hiring. And EA has just conveniently pointed out that their employees are not bound by non-compete agreements.

      The only reason EA had such poor earnings is that so few people actually GOT a 360 duri
      • > The only reason EA had such poor earnings is that so few people actually GOT a 360 during the
        > holiday sales season; customers are saving up their cash instead of spending on current-gen
        > games.

        I doubt it. If they didn't get a 360 they'll buy a game for whatever system(s) they've currently got, and buy a 360 game when they get a 360 console.
        • Gaming studios are just like movie studios, produce best sellers and your profits soar, produce lame titles and they crash. So welcome to the speculative fun of gaming companies, as the years go by they will alternately soar and crash, the good ones will survive regardless but don't expect stability (neither as an investment or as employment).

          As a coder if you want to make money in gaming, partner up with other coders produce one top selling title and then sell out. The alternate as a coding employee, exp

    • It could be _that_, or (as I'd like to see it) it's all the people boycotting them for their anti-competitive acts, and buying out good talent and turning them into crap (Maxis, Westwood, soon Ubisoft, etc.)

  • I will never buy another EA game (Score:5, Interesting)

    by INeededALogin ( 771371 ) on Friday February 03, 2006 @04:57AM (#14633457) Journal
    I looked forward to playing Madden on my PSP. Which turned out to be one of the buggiest games ever released. The game crashed repeatedly and the load times were unbearable. It would even tease you and make you think that the load times were over at some points. Now, the load times are mostly Sony's fault(UMD is slow), but the crashing of the game was inexcusable and I stopped playing this after the first night I owned it.
    • Load times might be the factor that keeps me from ever picking up a PSP despite being enamored of its gadgety goodness. I've been spoiled by all the years of Nintendo Gameboy/GBC/GBA/DS fun to put up with load screens on a portable.
      • *comes back from playing AC*
        I'm sorry, what was that?
        • Hehe. I've been playing Animal Crossing way too much for the last month and exclusively for the past week (I finally stumbled into a "perfect town" rating and now have to maintain the hell out of it). I think the DS is going to be my primary console until the X360 experiences a price drop and some good new games. :)
      • I like loading times for Nintendo systems in general. Many people might have derided the N64 cartridge, but I'll be damned if I didn't prefer the quick loading times of the N64 over the high memory capacity of the PS1. Besides, if you can fit Ocarina of Time into one cartridge...

        The Gamecube is simarily designed with loading times in mind. Sure, not every game for the console is a poster child for quick loading, but most first-party and some third-party titles don't even have loading screens (Smash Bros M
    • I stopped playing this after the first night I owned it.


      If you didn't return it, or at least sell it off at a used game shop, then EA doesn't care -- they got your money.
  • I was wondering if anyone knows how console software sales were affected the year before the PS2 was released? It just seems to me that many consumers are choosing to save some of their money for the new consoles, and that the drop in revenue is nothing more than expected. Perhaps it's just me, but I've always felt that the quarterly system does not fit the video game industry very well. Judging the health of the company four times a year when their base products take eighteen months to develop just seem
    • Actually there has never been this large of a "slump" even before other releases. This "slump" is a made up excuse for low sales over the entire year to appease stockholders.

      This slump has been caused by the failure to release new and exciting games that have any mass appeal. The Sims was one of the last games to do this and that is how old now? FPS, MMO and RTS games are a very narrow market, and cannot sustain an industry as game makers want to do since they are cheap, easy, and quick to pump out. The ind
    • Quartly financial reporting is stupid. I think it hurts the economy overall more than anything. Well that and day trading... stocks seem to play out more like the market in MULE (nevermind an old, old reference). It seems odd to me that I can play the market game more by setting up automated rules than by knowing the market. I find that disturbing. If quartly results weren't so important the quality of all products would improve. Instead the general ability to sell as much as possible in a certain tim

  • quick fix! (Score:4, Insightful)

    by typidemon ( 729497 ) on Friday February 03, 2006 @05:07AM (#14633484)
    Don't release crappy games!

    • Better fix! (Score:1, Funny)

      by Anonymous Coward
      Don't buy crappy games!

      But then a lot of people still watch Reality TV, so the Human species is basically a lost cause I guess.

      • Re:Better fix! (Score:1, Funny)

        by Anonymous Coward
        I think the article is the result of that fix.

  • They treat their customers like shit (Score:5, Insightful)

    by Aceticon ( 140883 ) on Friday February 03, 2006 @05:19AM (#14633514)
    EA is the worse company in the industry in terms of the way how they treat their customers.

    Just look at the whole mess around BF2 (Battlefield 2) - they had a game with the potential to be the BEST FPS of the decade an what did they do:
    - Rushed it out the door with many bugs, unoptimized code (you need 2GB memory to be able to play it properly) and unbalanced gameplay (unbeatable airpower anyone?).
    - Did not release a proper fix for several months. Even now it's still an unbalanced hog of a game.
    - Instead of fixing the game, they invested their resources into getting a (payed) game expansion released after just a couple of months. This actually made the game even more demanding in terms of system resources and less stable. A second expansion is scheduled to come out this month.
    - The game expansion added new weapons that could also be used in normal maps. Said weapons were more powerfull than the ones available to players with only the original version of the game, thus meaning that those with the expansion had a built-in gameplay advantage. This is pretty much the sleaziest way to push an expansion i've ever seen in this industry.
    - All the while, any support requests registered in their site were magically going to the status "solved" without them actually solving anything.

    Basically these guys keep treating their whole client base as (fanboy) teenagers and kids (which a lot of them are), while the demographics of gamers has been steadily changing in the last decade and the 25-35 year old males now form one of (if not the) biggest group of gamers.

    Notice that 25-35 year olds have a lot more disposable income than teenages and kids ....

    Meanwhile the rest of the industry has actually moved out of the 1990s mentality of "people are used to games that crash so we can rush them out the door"...

    I am not surprised at all that EA's profits are significantly down.

    Still, i hardly expect that EA's management will take the blame - i'm sure that, somehow, it was all due to software piracy ...
    • I blame the internet on dodgy game releases now that require constant patching, playing games 10 years ago the titles did have their problems, but they were no where near as buggy as they are these days, it seems like developers know they can release titles with bugs & expect the general public to do their testing so they can patch the holes later.

      Im not looking forward to the PS3 with online, I buy a console because I know I won't have to worry about game patching, it looks likes thats all about to cha
    • I gave up playing BF2 a while back because of all the problems I had with it: crashes, poor performance, lag, bugs. When I heard about the paid expansions I vowed to never go back to the game again. Wizards of the Coast etc. have been getting away with that kind of crap for years, I won't support it in video games as well.

      In five years of console gaming I haven't had to suffer a single bug - why should PC gamers put up with it?
    • Blaming software piracy for falling profits is *so* 1990's.

      Remember kids: Blaming the second hand games market is the in thing to do now.

    • Re:They treat their customers like shit (Score:4, Insightful)

      by X0563511 ( 793323 ) * on Friday February 03, 2006 @07:39AM (#14633824) Homepage Journal
      "- The game expansion added new weapons that could also be used in normal maps. Said weapons were more powerfull than the ones available to players with only the original version of the game, thus meaning that those with the expansion had a built-in gameplay advantage. This is pretty much the sleaziest way to push an expansion i've ever seen in this industry."

      Sounds kinda like what MS did with MechWarrior 4. For example:

      I own MW4: Vengeance, and make a game for the public to join. What happens? People who bought the "mech packs" can come on into MY virgin game and use their vehicles and weapons that I, the friggin host of the game, can't.

      Used to be my favorite game. Stopped playing after that one (mostly because for some reason nobody released rips on the networks)
    • You left out they have already planned a third expansion pack, there have only been two or three patches for the game since release!

    • Re:They treat their customers like shit (Score:4, Insightful)

      by aaronl ( 43811 ) on Friday February 03, 2006 @08:51AM (#14633999) Homepage
      Sounds like exactly what EA did with C&C Generals. I never bought another EA game after that pathetic attempt at release software. You couldn't even reliably *play* a network game, so it was pretty difficult to worry about cheating. Every patch broke some other aspect of the game, and every other introduced some new and more annoying DRM infection. The next patch would remove the DRM so that people could play the game.

      The other biggie, Ubisoft, is just as bad. I had to actually block all traffic to Ubisoft's servers so that I could play Raven Shield. It would attempt to communicate with their servers to "authorize" the network game, but if my Internet link was down it would just stop the game every 10 seconds or so while the attempt timed out.

      After those two little brushes with the stupidity of EA and Ubisoft, both of them guaranteed that I won't be purchasing from them.
    • Well, that's only fair, since they also treat their employees like shit...
  • Maybe EA will realize they can't work their Devs to death rehashing old games and still keep people interested. Maybe MS will start making a *nix OS. Maybe pigs will sprout wings. It's a strange world we live in after all.

  • Too busy playing to buy new stuff? (Score:4, Insightful)

    by Nice2Cats ( 557310 ) on Friday February 03, 2006 @05:26AM (#14633536)
    Given the number of people I know who have become addicted to Civ IV -- not an EA game, I think -- I am not surprised: They are not out there buying more games as usual. This has made me wonder if there could ever be a "game to end all games", one that is so good that you spend so much time playing it that other games die of attention starvation, and their companies with them. Think of all the time people still spend playing Starcraft. Is that the reason why there has never been a new version, they are afraid it will be too good?

    Me, I'm still busy with NetHack [nethack.org]. But once I finish that -- any day now, really, or next week the latest -- I might take a look at this new-fangled stuff...

  • I figure a lot of the losses have to due with the bombing of Madden among other sequels. The new features were almost non existant and the graphics and gameplay really haven't changed that much since 2001.

    Maybe next year they'll have the new engine with skeletal animation and real physics etc that have been standard for 2-3 years now. I'm still surprised by the number of bugs present on what is essentially a game with 5+ years of dev time invested in it.

    Of course they're branching off into an AFL football
  • This just adds to the body of evidence that Google is the way you build a good group of people. Taking everything into account.

  • It's all because Godfather was delayed (Score:5, Informative)

    by Jarnis ( 266190 ) on Friday February 03, 2006 @07:14AM (#14633769)
    Their profits tanked, because their 'biggest' christmas title, Godfather, was delayed. Apparently it was so buggy and incomplete that even EA could not hash together a shippable build in time for holidays, and now it's been pushed back to late spring.

    One 'major' title is easily 20-30% of their bottom line in a quarter.

    Now the reason why they aren't improving otherwise is because they treat their customers like shit, and are ran by clueless idiots that chase the quick buck over long-term sales and customer loyalty - bit like every other megacorp on the planet.
    • Now that makes sense. I was wondering what happened to the Godfather game. Too bad it seems like it's going to be a big steaming pile of poo. I was expecting a "Goodfellas meets Grand Theft Auto" style of game but I wasn't holding out much hope of EA getting it right. Now I feel even more certain it'll be awful.

      Fun story... I read that Marlon Brando did voice work for the game shortly before he died. Apparently EA games was in contract negotiations with an unnamed actor (Al Pacino) for voice work. The unnam
    • Apparently it was so buggy and incomplete that even EA could not hash together a shippable build in time for holidays, and now it's been pushed back to late spring.

      You make it sound like a bad thing! The fact that they let it miss the holiday season indicates, to me at least, that they are focusing on a high-quality product instead of trying to "hash together a shippable build".

      Everybody gives game companies shit for releasing incomplete or buggy games, and now some people are giving companies shit for not
  • they just laid off 5% of their employees..
  • I'm not seeing why people are moaning about EA's product quality. I stopped buying almost all PC game in the past 2 years as they're all buggy and badly written. I bought Civ4 and I had to actually pirate it to get my official copy to work. No more for me.

    But let's look at the market and why it is operating the way it does. First of all, no company is getting boycotted for bad quality games. In fact, the average gamer that I talk to has no problem with a month or three of bugs -- it seems that the firs
    • Same here. Civ IV is the last PC game that I will ever buy.

      I gave it my best the first week I had it, but after numerous crashes and hengs, I had to move on. I've been watching the patches that have come out, but haven't tried any yet as they don't seem to address any of the issues that I had.

      Next time, Im pirating. I don't give a shit. I've purchased too many rushed, unstable, and overpriced PC games. I'm not going to get burned again.
    • "Beyond that, we have to look at who EA is. I really hate it when people say "I hate Company YYY." "

      EA may have a lot of different producers, but they are not independent thay are all controlled by EA. And they may all be tight knit as you say but EA is the one that sets the production schedules and allocates resources, and they are responsible for the quality of the end product.

      "In the end, EA is providing the market what it has accepted as a level of quality: a not-quite-ready model of product selling bef
  • Not to sound smug, but I have been saying for well over a year now that the game market is in a large slump and it is not this *huge* business that is raking in cash and clamoring for new, ultra expensive, consoles. Many, including the game publishers, have kept up a strong public wall of block-buster years and large profit hype... all false.

    In the past month alone almost every Slashdot story has been about company after company in massive losses and huge slumps. Not surprising. The PSP and DS adoption rate
  • Damn, I am thinking about working for EA now :) Tell me one other tech company that would have quarterly profits go down by 31% for like the 2nd or 3rd quarter in a row and still keep 95% of its work force. I know IBM and Intel are not that nice.
  • battlefield 2 is givin me problems.

  • Their Harry Potter Goblet of Fire game also sucked (Score:1, Insightful)

    by Anonymous Coward
    Go read the reviews for this PC game on Amazon. http://www.amazon.com/exec/obidos/tg/detail/-/B000 9YJM9W/002-6493180-4009643?v=glance [amazon.com]

    Seriously, it is about 99 out of 100 negative. I wish I had read those reviews before I bought it for my kids. The previous three HP games they made were very decent. This 4th one was awful. The worst thing about it was the way in which the game maintains a helicopter eye's view of everything. Instead of feeling like you are part of the action, it feels like you are wat

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