EA: hit by the financial storm

Games
1

So EA is letting go of 540 people., based on falling share prices, game delays and unrealized development projects.

One of the conventional wisdoms I’ve seen bandied around here was that the entertainment industry is fairly recession proof, (people just stay home and game!) but this is a fairly clear indication that the economy is going to hit the game industry somewhat hard. I’ve been liking Ricitello’s direction towards game development lately and would hate for EA to stop being able to fund companies like Bioware, Mythic and Harmonix.

Apologies if this is posted elsewhere.

2

Guess Spore should have been better.

Oh no! It was all the pirates!

It’s all their fault!

3

One of the conventional wisdoms I’ve seen bandied around here was that the entertainment industry is fairly recession proof, (people just stay home and game!) but this is a fairly clear indication that the economy is going to hit the game industry somewhat hard.

One should not ignore the fact though that sales were up by 40%. $894m in FQ2/2008 vs. $640m in FQ2/2007.

-Julian

4

Today’s battery of pink slips may not be the last. Executives also said that EA “will manage head-count decisions aggressively going forward.” The company plans to reduce hiring in high-cost territories, and will expand operations in “lower-cost locations.”
They’re going to outsource Dragon Age!!!

5

This probably includes the housecleaning they’ve been doing at Bioware. The final swath to chop the company down to greater profitability.

Good news: Dragon Age will ship on time.

Bad news: No Bioware game has ever been ready to ship until 6 months after the ship date.

6

800,000 players on 1.2 million copies of Warhammer Online is a great launch. Only successful EA online game since UO1?

7

What’s the BioWare housecleaning news?

8

EA’s been chasing out a lot of the long time employees. Bunch of my friends are out of the job. Some people who’ve been there a decade or more.

9

Get ready for American McGee’s Dragon Age.

10

That’s the jock team. The D&D nerd team could still win out.

Perhaps EA is just eliminating all the science teams.

11

There’s no better time to clean house than when the market is in a place where no one will question your behavior as anything but prudent.

(P.S. You’re all fired.)

12

That sucks. I really don’t like seeing guys who have been loyal to a company kicked out like that. I also think it makes surprisingly little sense.

13

Quick clarification - EA doesn’t fund Harmonix. Harmonix is owned by MTV Games. EA just publishes their games.

14

Gaming as a recession-proof industry strikes me as an insane notion. I would think gaming is a coal mine canary if anything.

15

Yeah, but that didn’t stop their share prices plummeting. To be fair to them, it’s not their fault though.

Also Charles, any clue what reason they are giving for the layoffs of the long time people?

16

If I can venture a guess: seniority = higher pay.

17

Ehh, stats from past recessions show that people stay home more and put off big purchases, so they feel like cheaper pursuits are justifiable and keep spending on stuff like home entertainment. Doesn’t mean games will necessarily be totally immune, but it’s a factor.

Good for us free to play folks :)

18

Yeah I caught that too. If those figures aren’t cooked, that’s 66% retention past the first month which I think is pretty phenomenal.

I hope it is. I want the game to get lots of money. It’s got some annoying rough edges right now, but overall I think it’s got fantastic potential if it gets its legs.

19

So profits are up, and they’re laying people off? Business as usual at EA, I guess.

20

Profits can always be higher.