No Happy Holidays for 500+ Laid Off by EA

October 31, 2008 -

Citing losses and difficult economic news, game publishing giant Electronic Arts announced yesterday that it was laying off 6% of its work force.

That's more than 500 employees.

As reported by VentureBeat:

During the quarter, EA relied on the staple of its sports franchise, Madden NFL 09, which sold 4.5 million copies. Spore sold two million units. That’s a respectable amount, and the title is sure to sell steadily into the future to mass market audiences. But it’s not the mega-hit that some had hoped for. Another big title was Warhammer Online... EA sold 1.2 million copies...

[EA CEO John] Riccitiello said in a conference call that the postponement of the Harry Potter movie and its accompanying game was a big reason for the shortfall...

In an investor's note issued moments ago, Wedbush-Morgan analyst Michael Pachter was critical of EA management, while still recommending the publisher's stock as a strong buy:

EA management was somewhat aloof during [yesterday's] earnings call. With the stock hovering near a seven-year low, management continued its recent history of disappointment, and spent an inordinate amount of time sowing seeds of fear about the potential for a tepid holiday sales season. EA’s share price in after hours trading reflects that many investors have abandoned hope...

 

management has demonstrated an uncanny ability to snatch defeat from the jaws of victory in the eyes of investors, and we think that these old habits will take a long time to die...

Seeking Alpha has a transcript of yesterday's conference call.

GP: We'd have to agree with Pachter. While John Riccitiello started strong when he returned to EA last year, in 2008 we've witnessed a series of embarrassments take place on his watch. From the lengthy, abortive attempt to seize Take-Two to the Spore DRM debacle and Ricitiello's subsequent insult to those who protested, it hasn't been pretty.

Regarding Spore, while it has done well at launch (thanks to the hype) the game is simply not going to be a Sims-like cash cow in the long run. It's not as well done as The Sims and lacks the feminine appeal which sustained The Sims over the long haul.


Comments

Re: No Happy Holidays for 500+ Laid Off by EA

You are quite correct. In fact I'll go further on your comment. Their families will be the happiest ones! Worked to the bone and wives and kids are just an afterthought to deadlines. The wives of EA employees started a site to bitch about EA!

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