EA Narrows Q1 FY09/10 Losses News

Strong sales of The Sims 3, EA Sports Active and Fight Night Round 4 helped EA to narrow its losses for the fiscal first quarter ended June 30th 2009.

EA's non-GAAP revenue for the period rose by 34% to $816 million compared with $609 million in the previous year.  Gross profit for the period stood at $499 million with operating expenses of $510 million, leading to an operating loss of $11 million compared with a loss of $245 million for the same period in the prior year.  As a result, EA narrowed its net loss for the period significantly from last year's $234 million loss to a net loss of $6 million.

The report highlighted the fact that video game sales dropped by an estimated 10% in Europe and by 12% in North America compared to last year, decreases that EA admitted were "softer than expected" and attributed to fewer hardware sales.  EA also highlighted the sudden drop-off in the music genre, which decreased by 52% compared to last year. 

Despite the decline, EA expects the full year to show growth on last year, fuelled by "great titles, hardware catalysts and easier compares".  As a result, EA is remaining to previous guidelines for the duration of the year.  Non-GAAP net revenue is expected to come in at $4.3 billion; operating expenses are likely to stand at $2.1 billion

Sales of The Sims 3 surpassed 3.7 million units, outpacing The Sims 2 by more than 25% compared to similar periods.  EA's foray into the fitness genre saw sales of EA Sports Active pass more than 1.8 million units making it their biggest selling Wii title to-date, although there's still some way to go if it wants to take Wii Fit's crown.  Fight Night Round 4 sold more than 1.7 million units in the final two weeks of the quarter, and became EA's highest rated title so far this year.  In addition, Tiger Woods PGA Tour 10, The Godfather 2 and Harry Potter and the Half Blood Prince each sold more than one million copies during the period.

Looking at the digital service saw EA generate $124 million in non-GAAP revenue, representing a 38% increase year-on-year.  Of this figure, $31 million was attributed to sales of digital content, a twofold increase over last year and largely attributed to demand for the FIFA 09: Ultimate Team package which generated over $12 million.  Subscription revenue was $36 million, an increase of 33% year-on-year due to Warhammer Online.

Within the report, EA Sports' Peter Moore confirmed that the PS3 and Xbox 360 versions of Grand Slam Tennis have been delayed, in order for the team to concentre on a forthcoming expansion to EA Sports Active due for release in time for Christmas.  Moore also confirmed that Madden Arcade will be following later in this year in a similar vein to NHL 3-on-3 Arcade.