14 DAY TRIAL // Electronic Arts, one of the biggest videogame publishers in the world, has officially announced that it expects to earn less money than provisioned for the financial year set to end on March 31 and that the overall losses it will take are also set to climb over initial estimates. The announcement prompted financial markets to drive down the price of EA shares by about 40% and very near to their historical low of 14 dollars.
The main culprits for the situation at Electronics Arts are said to be the weak sales registered over the Christmas period, which is crucial for the videogames industry and the European market, which soaked up less copies of titles like Need for Speed: Shift, The Sims 3 or Dragon Age: Origins than the company initially expected.
EA is now saying that it will bring in between 3.6 and 3.675 billion dollars during this financial year, which is less than the 3.9 billion initially announced to the public. Losses per share are also expected to grow between 1.94 and 2.24 dollars up from a previous maximum of 2.05. Electronic Arts has not announced its results for the quarter that ended on December 31, but revenue for that period is expected to be down as well.
Electronic Arts is currently in the process of slashing about 1,500 jobs in an effort to control costs and shift to a corporate structure that puts the emphasis on quality of the sales generated and not only on quantity.
John Riccitiello, who is the Chief Executive Officer of the company, said during a conference call following the announcement of the reduced estimates that it takes time for the new strategy of the publisher to produce results. Maybe 2010 will be the year when the first green shots start to appear for EA.