EA Sees Increased Sales, Decreased Profits for Holiday 07

January 31, 2008 | By: David Radd

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It appears as though Electronic Arts is still the number one publisher worldwide, but that doesn't mean they aren't in the red. The company also mentioned ongoing PS3 development difficulties and Skate success.

Electronic Arts today announced the results for the third-quarter of fiscal 2008, which ended December 31, 2007. Sales were $1.5 billion for the holiday period, up nearly 20 percent compared to $1.28 billion last year and a new high for the company. However, EA had losses of $33 million as compared to profits of $160 million during the same period the year previous.

"This was a record revenue quarter for EA and the single biggest revenue quarter for any third party publisher in our industry," said John Riccitiello, CEO of EA. "While we are disappointed that two titles slipped out of the March quarter, Burnout Paradise is off to a terrific start and we are looking forward to the upcoming launches of Army of Two and FIFA Street 3."

Among the highlighted games for fiscal 2007 were Need for Speed Pro Street, which sold 5.5 million copies in the quarter, with two-thirds of the sales coming internationally; FIFA 08 sold 4.5 million copies in the quarter, making it the company's best selling title for 2007; Rock Band also sold 1.5 million copies and The Simpsons Game sold 4 million copies.

EA noted that they were the number one publisher worldwide for calender 2007, taking into account their nearly 20 percent market share in both Europe and the U.S. The company also added that they are the number one third-party on Wii during the same period, increasing their market share on that platform more than 10 percent year over year. EA also mentioned in brief that Battlefield: Bad Company and Mercenaries 2: World in Flames have been pushed back to sometime in fiscal 2009.

In the conference call that followed the fiscal report, Riccitiello played down the failure rate in Rock Band guitars, saying that they received complaints about less than 10 percent of the packages. He also commended the work that they've done with MTV Games to get replacements out as quickly as possible. It was also noted that Skate has been outselling Tony Hawk, gaining a 55 percent market share.

Riccitiello also commented that PS3 development difficulties were ongoing. While Burnout Paradise came out on time because the PS3 version was the lead SKU, when development occurs for titles across Xbox 360 and PS3 simultaneously, PS3 projects still see some delays. Riccitiello did add that the problem has decreased compared to nine months ago.

Looking at the fourth quarter ending in March, EA is forecasting sales between $925 million and $1.05 billion. The publisher also expects a loss per share between 33 cents and 52 cents. For the full fiscal year, EA expects revenues between $3.46 billion and $3.59 billion, compared to the previous guidance of $3.35 billion to $3.65 billion.