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Electronic Arts meets financial targets for Q2

Leading publisher Electronic Arts has announced financial results for the quarter ended September 30th, showing that the firm met its projections for the period, but has issued conservative guidance for the December quarter.

Leading publisher Electronic Arts has announced financial results for the quarter ended September 30th, showing that the firm met its projections for the period, but has issued conservative guidance for the December quarter.

Revenues for the firm climbed by 35 per cent year on year, bringing it to $716 million for the quarter - in line with the high end of the firm's own projections, and with market expectations.

Profit for the quarter was also up, at $97 million - an increase of 27 per cent year on year, and broadly in line with expectations, although higher than expected advertising costs and a profit hit from the withdrawal of Tiger Woods PGA Tour 2005 in Europe caused a slight dip.

The launch of The Sims 2 was the headline story for EA during the quarter, and the game has now sold over three million units - making it into the strongest launch in the history of the company. Tellingly, some 70 per cent of those units have been sold outside the USA, reflecting the increasing strength of EA's overseas business.

Other titles including Burnout 3: Takedown, Madden NFL 2005 and NCAA Football 2005 also performed strongly during the quarter, with over 1.5 million unit sales apiece - in fact, over four million units for Madden.

However, despite a largely successful quarter, EA has faced increased pressure in certain key sectors, such as its sports titles, and it's telling that the company has cited very conservative guidance for the December quarter.

For the third quarter, EA expects to report revenues of $1.4 to $1.475 billion - exactly the same as the $1.475 billion figure reported in that quarter last year, with the firm apparently concerned that heavy competition will keep its revenues flat.

In a year when the company has managed strong growth in previous quarters, that estimate is likely to be seen as disappointing by many investors, but EA has wisely moved a number of its titles into 2005 rather than releasing them into the incredibly competitive 2004 holiday market.

Titles such as Halo 2, Grand Theft Auto: San Andreas, Half-Life 2, Metroid Prime 2 and Gran Turismo 4 are likely to dominate the pre-Christmas market to an extent which will be damaging to sales of almost everything else - even games from the mighty EA.

During the conference call, EA also revealed a number of key titles for the fourth fiscal quarter - the first three months of 2005 - with a new Fight Night boxing game, the first Sims 2 expansion pack and a new console Medal of Honor title all due before the end of the financial year.

The company will also be hoping to get its six PlayStation Portable launch titles onto shelves during the 2005 financial year, which ends on March 31st - although that, of course, depends largely on Sony managing to keep to its much-debated PSP launch timetable.

EA revealed last night that FIFA Football and MVP Baseball are the two remaining games in its PSP launch plans, joining the previously unveiled Need for Speed Underground: Rivals, Tiger Woods PGA Tour, NFL Street and NBA Street (and curiously, making for a total of five games from the company's EA Sports brand for the launch, with only one from the EA Games brand).

About the Author

Rob Fahey avatar

Rob Fahey

Contributing Editor

Rob Fahey is a former editor of GamesIndustry.biz who spent several years living in Japan and probably still has a mint condition Dreamcast Samba de Amigo set.

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