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Thursday, October 30, 2008
 
EA Downsizing
Ouch:

EA's Q2 loss grows to $310M, will cut 6% of work force

And a little more:

Electronic Arts Short Circuits

Not happy news for my buddies in the mainstream games biz. Unless they are those in other companies who have had trouble finding people to hire. I dunno about you, but to me $310 million sounds like a lot of money to lose. Particularly in a single quarter. Maybe they expect to make it all up in Christmas sales, but yeesh.

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Comments:
I'd love to think it was a result of all the anti-DRM boycotts, but it's more realistic to attribute it to the downturn in the economy.
 
It might actually have something to do with the DRM backlash. Normally, games do well in bad economies as people attempt to escape their dismal reality... but this being EA, they'll blame pirates.
 
I doubt it has nearly as much to do with DRM backlash so much as the quality of their games, personally... :)

I dunno about games in poor economic conditions. Last downturn, a bunch of studios in my area closed their doors or had major layoffs. So... times get tough all over. Add to that the fact that games cost about 5x as much to make these days as they did 10 years ago... but they sure don't have 5x as many customers (MAYBE 2x, if they are lucky...), and there's not much margin for downturns.
 
I know I shouldn't be feeling this, what with the fact that it means that the employees are the ones that primarily suffer, but I'm feeling a thrill of schadenfreude over the news.

It feels like the hand of the market smacking them down, you know?
 
EA is the frontrunner in Germany for high priced games.
They always try to maximize their profits and with this I can live.

But this time they were really creative in inventing new thumb screws:
http://www.bluesnews.com/cgi-bin/board.pl?action=viewthread&threadid=92705

I hope they eat their feces for this.
 
@T-boy - Just as in war, when the generals screw up, it's the soldiers who pay the price. Although in this case, I do think the economy in general is playing a pretty significant role.

@Calibrator - This continues to beat one of my favorite drums. This is the same issue as DRM and used games for me - the question of ownership. EA is leading the charge in trying to change the whole concept of game ownership. They are using every means in their disposal to try and convince you that you don't own the game you bought. You are paying more, and getting less. What exactly you are paying for, I don't know.
 
Fricking EA. Just like the fricking Guild Navigators in Dune; they manipulate you into their palms and then force you to pay and pay and pay.

Death to the Guild! Kill the Navigators! Muad'Dib for President!
 
Attention!
The EA community manager obviously retracted his words:
http://forums.ea.com/mboards/thread.jspa?threadID=457006

But apparently this wasn't the first time that over-zealous community personnel made such a threat at EA:
http://www.shacknews.com/onearticle.x/55656
 
The article said they were going to save $50 million via their cost-cutting plan, which includes the 6% layoffs.

How much does Riccitiello make? Maybe they could keep half those jobs if he gave himself a pay cut?
 
The answer to my own question appears to be $5 million. Though his salary itself was $750k. That's still an ungodly amount of money, but at least it's not AIG-style...
 
$310 million isn't a lot. Check out the quarterly losses by Midway over the last 3 years -- and they are a MUCH smaller company.
 
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