News
EA Reports Nearly $650 Million in Losses During Holiday
Good Thing They Just Started Making Good Games.
by 00.19
According to Electronic Arts' John Riccitello, the company's fourth quarter losses of $641 million were "a clear disappointment." As a result, the amount of layoffs occurring will increase. Over 10% of the workforce (1100 people) will unfortunately be without income as a result.
While the publisher had originally made plans to consolidate 9 locations, that number will now increase to 12, as well. In addition, they've decided they will be publishing fewer SKUs in the future, reducing the number of games released from 145 to 125, by 2010.
Clearly, what was once thought to be a "recession proof" industry has seen its fair share of major hits taken recently. What's most disappointing (other than the loss of so many jobs) is that EA's problems seem be to coming at a time when they stopped being a sequel/shovelware producing company, and started focusing on fresh and innovative IPs. While the status of many games is unclear at this point, with layoffs at Tiburon and the shutdown of Black Box, it's apparent that no franchise is safe. Here's hoping the rest of this year doesn't go as poorly as the end of last year for anyone else.
[Source]
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Comments
This seriously blows. I never thought I would feel sorry for EA, but they have turned their image around so much this year, and released some really great, original games. I really hope this year is better for them.
that is unfortunate for them and for the people that will be losing jobs because of this.
That sucks, big time. I hate to see so much people lose the jobs for unfortunate reasons and EA had a very good turn around last year with great new original games. Not a good way to start out your year, hope things do get better.
Sad for those losing jobs, hope things turn around.
Still, I think the game industry needs a wake up call. The industry in general has grown substantially over the years and sales keep growing each year and yet stuff like this happens. I don't believe this is a case of the recession because it seems every year the last 5 years or so is a "record" year for games sales.
The problem is clearly in the amount of money spent on developing games.
Companies need to sell an obscene number of games these days to make the money back from development. Maybe they should focus more on core gameplay elements and artistic design as was the case in the 16 bit days instead of on celebrity voice acting, music licensing (and hiring the Philharmonic), physics engines, "realistic" weather systems, 100,000 polygon faces, and all the other stuff that demands so many resources.
I guess it's a double edged sword though because if not for impressive graphics engines and photo-realism in modern games the industry wouldn't have grown as much. Or would it? I mean look at the DS' success.
This applies to hardware as well. Look at how much money Sony and MS are losing with each sale of their systems and keep in mind that the Wii is leading the pack and its on lesser tech.