EA reports 25% revenue fall for Q3
But publisher slashes losses compared to previous year; headcount reduction "two-thirds" complete
Electronic Arts has reported its third quarter financial results for the three months ending December 31, 2009, noting a revenue fall over the previous year from $1.654 billion to $1.243 billion.
However, the publisher also slashed losses over the same period from $641 million to just $82 million as the impact of restructure and refocus begins to have an effect.
The company also noted $103 million of net revenue deferral for online-enabled packaged goods and digital content, which it says will be recognised in future quarters.
Among the reasons cited for the drop in revenue were a quiet release schedule in the build-up to Christmas, as well as a weak performance in the packaged goods market in Europe.
EA, along with several other companies, took the decision to move several key products - including Dante's Inferno and Mass Effect 2 - into the early part of 2010 in order to allow more time for game polishing and to avoid competing with key franchises such as Call of Duty and Assassin's Creed.
But overall results, given the general market decline, were positive with the company sitting as the number one packaged good publisher in North America and Europe overall for its fiscal year-to-date - first for PlayStation 3, PlayStation Portable and PC games, and second for Xbox 360 and Wii.
Digital revenue growth too was strong, with a 30 per cent rise in non-GAAP numbers year-on-year to an all time high for the firm at $152 million.
"EA is growing share in our packaged goods business and our digital businesses continue to grow rapidly," said CEO John Riccitiello. "Mass Effect 2 is the first blockbuster of 2010 and we are looking forward to the launch of Dante's Inferno and Battlefield Bad Company 2."
And CFO Eric Brown added: "We are expecting an increase in FY11 full year non-GAAP earnings per share on the basis of strong cost controls and growth in our digital businesses."
He went on to note that the company's restructuring was proceeding as planned, with $96 million in costs incurred in Q3. "We closed five locations and are approximately two-thirds with position reductions at the end of January 2010."