EA Surprises - Q1 2008 financial report posts $454M Loss

. Wednesday, May 14, 2008

In one of the biggest years ever in gaming, Electronic Arts (ERTS) posted a $454 million net loss in its fiscal 2008. That may come as a bit of a surprise, given that 27 of EA’s titles this year sold more than 1 million units, and 15 that sold more than 2 million.

In fiscal 2007, EA had 24 titles that surpassed the million mark, but managed a net income of $76 million. That’s not to say that EA just finished a bad year – far from it, as the games maker reported a net revenue of $3.665 billion in fiscal year ended March 31, 2008, up 19 percent as compared with $3.091 billion for the prior year.

In fact, the past fourth quarter was a record setting one, with sales up 84 percent to an impressive $1.13 billion. The record period was driven by PlayStation 3 and Xbox 360 cross-platform titles Burnout Paradise, Army of Two and Rock Band. Despite that, net loss for the quarter was $94 million as compared with a net loss of $25 million for the prior year.

The cause for the loss can be partly attributed to the acquisition of game development studios BioWare Corp. and Pandemic Studios in a deal worth $860 million. Though not exactly of the same acquisition type, EA managed to lure former top Microsoft executive Peter Moore away from the Xbox business to helm EA Sports.