Electronic Arts Lowers 2009 Forecast, Will Cut Jobs

[Elfen Lied]

Oct. 30 (Bloomberg) -- Electronic Arts Inc., the world's second-largest video-game maker, lowered its forecast for the fiscal year and said it would cuts jobs in response to a deteriorating economy. The shares fell.

The company will eliminate 6 percent of its jobs to save $50 million a year, Redwood City, California-based Electronic Arts said today in a statement. Profit excluding some costs will be $1 to $1.40 a share for the year ending in March, below the $1.30 to $1.70 projected in July.

Retailers are seeing a decline in foot traffic, Chief Financial Officer Eric Brown said in an interview. Shelf space for video games is increasing at key stores, he said. [/b]
``We're performing at or better than the overall industry so we're taking share,'' Brown said. ``We've adjusted as we think necessary.''

Electronic Arts fell $3.73, or 13 percent, to $24 in extended trading from a close of $27.73 in Nasdaq Stock Market trading. The stock has fallen 52 percent this year.

The company reported its second-quarter net loss widened to $310 million, or 97 cents a share, from $195 million, or 62 cents, a year earlier. Excluding some items, the 6-cent loss matched the average of 21 analyst estimates compiled by Bloomberg. Sales rose 40 percent to $894 million, lifted by ``Rock Band'' and the ``Madden'' football titles.

Sales in the current quarter will be hurt by a drop in consumer confidence and a delay in the release of a new ``Harry Potter'' game, Janco Partners analyst Mike Hickey said in a research note yesterday. The Potter game was postponed after Time Warner Inc. pushed back the release of ``Harry Potter and the Half Blood Prince'' to July from next month.

Viacom Inc.'s MTV Networks, maker of the ``Rock Band'' play-along video game, announced it will produce a title with songs from the Beatles for the 2009 holiday season. Electronic Arts distributes ``Rock Band.''

To contact the reporter on this story: Michael White in Los Angeles at mwhite8@bloomberg.net

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I really want to know their PC Game numbers.

[dusdeedawn]

Well, if they would stop adding bullshit to their games, people would stop suing their asses, and maybe actually want to play some of EA's games, no? Ah, well, there's no accounting for bad business, I guess. It sucks that people are losing their jobs, though.

[SoggyFox]

Of course - rather than start using -good- business practices to restore our confidence, they are -firing- people.  Needless to say, I'm wishing JR gets everything he deserves.  And it always works.  Nemesis likes me.

[Zazazu]

Uh, guys, almost everyone is cutting jobs. 6% in this economy is not at all shocking.

[SoggyFox]

Yes, but....they wouldn't being needing to, if they hadn't been treating us like crap - half of the economy's problems stem from corporate greed and from what I've seen, JR is not exactly on the nice end of the spectrum.

[fway]

Aww, poor EA  why not treat your employees like crap, too. I wouldn't just blame it on bad sales/etc. I blame it on the Fed, if you want to know what I'm talking about, just google "Zeitgeist the Movie". If they got the damn DRM off their games, it is possible that they wouldn't have to cut anything.

[SoggyFox]

Its a lot more complicated, but basically, the bad economy is not helped by the US government continuing to give tax breaks to corporations that have moved their jobs out of the country, it is not helped by giving people who don't -need- to spend money a tax break - give that to middle classes and lower, they still buy.  There are a lot of things at the root of our current mess.

Not my fault, I never voted for Bush....for that matter, I've never voted for a Republican outside of local elections.

[kenmtl]

Whoa on the communism there Soggy.

And ya in tough times it's not so surprising. However having buttsecks'd your fan base probably isn't going to help the turnaround. Lets hope next quarter is better than last. NOT.

[Erhama]

It's people like JR who make me frustrated and angry....

DRM = Bad   Games = Good

DRM + Games = You dumbasses...

EA should learn to love, they didn't obviously learn that in Kindergarten, so go back to kindergarten, please? =3

If they didn't put in the DRM, sales would have gone so much farther than they are.

[justso]

The crap thing is the people who are making all the shite decisions will still have their jobs.  The little guy will get it right in the neck.  When the powers that be have cut the jobs and saved the company money, they will be awarding themselves huge well done bonuses. They will learn nothing and continue to screw us over. 

[Pescado]

This is why it is important to not only NOT buy SecuROM, but to stigmatize and ridicule anyone who DOES! Just as people who actually respond to spam are as much The Enemy, if not more so, than the spammers themselves, PEOPLE WHO BUY SECUROM ARE THE BIGGEST PART OF THE PROBLEM. They must be scorned, mocked, and ridiculed!

[Paden]

I've been doing that since Bon Voyage, Pescado, so that's nothing new. They need to get the high money bastards out of the the offices and put in lower-paid folks in that give an actual damn about the customers. Cut about three to five of the biggest wage earners outta there and they may actually save some money.

On another note, I'd love to see the voter be able to veto the pay raises the Senators and Congressmen get. They vote themselves a jump in money and don't understand why the hell the voters want them out of office. They whine about their cost of living going up and really, that's stupid. If they'd learn how to live like normal humans with one home and a mortgage, one car and payments and trying to put food on the table while paying all of their own bills, they might not get such an inflated sense of entitlement. Same goes for the corporate CEOs; make them live like normal wage-earners for once.

[HugeLunatic]

On another note, I'd love to see the voter be able to veto the pay raises the Senators and Congressmen get.

I would love to see this.  I don't understand how they are the only ones that decide their own pay raises.  Can you go into work and say I want a pay raise?  And get it?  No.  You have someone else deciding whether or not you've earned it.  Most of those Senators and Congressmen haven't earned a pay raise.

[Paden]

The only thing that many of them have earned is pay cuts, but I don't see that happening. Or jail time for some of them. I wish.

[SoggyFox]

They also get a pension, even if they only serve one term.

The reason they can decide such things is because Congress handles the budget.  At one point their pay wasn't so bad, only 120k a year or something - but when you are already rich, why do you need to get paid?  And since almost all of congress starts as a lawyer, they aren't poor.