EA: $3.1 Billion In Sales For F2007, Spore In Spring 2008?

Author: by Brandon Boyer, Jason Dobson

Electronic Arts has released its results for its fourth quarter and fiscal 2007, showing a slower quarter with profits down 4 percent and net losses up to $25 million, with sales driven by Command & Conquer 3 Tiberium Wars, Need for Speed Carbon, Def Jam: Icon and The Sims 2 Seasons. Quarterly sales fell four percent to $613 million from last year's $641 million, which the company said was primarily due to "the transition to next generation systems," and net losses of $25 million, up from $16 million a year prior. For the full fiscal year ended March 31st, EA saw sales of $3.1 billion, up five percent from the prior year's $2.95 billion, and profits of $76 million down from the prior year's $236 million for the prior year. The publisher also said seven of its games sold over three million units: Madden NFL 07, Need for Speed Carbon, FIFA 07, The Sims 2 Pets, The Sims 2, Need for Speed Most Wanted and 2006 FIFA World Cup. EA's stated highlights for the year included sales up 5 percent in North America, up seven percent in Europe, but down 15 percent in Asia, with positive foreign currency rate impact of $53 million. Sales in its mobile sector were up 37 percent to $540 million thanks to its first full year of catalog sales from its acquired JAMDAT Mobile studio, and the sales growth of the Nintendo DS. Sales of its 'digital revenue' -- online games, casual games, in-game advertising and microtransactions -- also rose 47 percent for the year to a record $127 million, and its casual portal Pogo surpassed 1.5 million paid subscribers, up 23 percent for the year. Popular titles for the year included Madden NFL 07, its singular top seller, and Need for Speed Carbon, which moved 8.5 million copies, as well as its Sims franchise, which in total sold 22 million copies. EA also noted its acquisition of five studios this year including Digital Illusions, Mythic Entertainment, Headgate Studios, Phenomic and SingShot, a 19 percent investment in Neowiz, and its agreement to publish Rock Band, Mercenaries 2: World in Flames and Hellgate: London. Finally, EA announced expected sales in fiscal 2008 of $3.1 to $3.4 billion, including first quarter sales of $300 to $360 million, even below Wedbush Morgan's recently lowered estimates of $385 million. Said CFO and CAO Warren Jenson, “We have a strong lineup for the year ahead. We expect to launch more than fifteen games based on wholly owned properties – including Medal of Honor Airborne, Army of Two, Boogie, MySims, Battlefield Bad Company, SKATE and Need for Speed.” [UPDATE: Speaking to investors during a conference call, company officials commented on the company's outlook, both near and long term. During the call, EA president John Riccitiello, who recently rejoined the company in February, noted that “our goal is to be the biggest murderers on Murderers' Row.” Specifically, the executive noted that this company's line up of high profile releases this year “kick off with Harry Potter and the Order of the Phoenix,” adding that “our portfolio is broader than just our sports titles, which traditionally have been our strength.” However, Riccitiello balanced this by stating that 2007 will feature “a very broad and strong base of sports titles.” He continued: “We'll be coming back in the fall with The Simpsons... a title that we are very bullish on. We see this as the year of The Simpsons, especially with the movie and upcoming DVD.” EA noted during the call that The Simpsons game is expected to release alongside the DVD release this holiday season rather than the fall's theatrical release. “Our plan was always to coincide with the DVD release rather than the movie, based on the timing.” EA officials on the call also took time to address Will Wright’s ambitious life simulator Spore, noting that the company “has tremendous confidence” in the title, but also adding that the title is apparently on the edge of slipping from EA's fiscal 2008 release schedule, saying “it's right on the bubble of Q4, if not some time in early fiscal '09” -- anywhere between January and June of 2008. The company furthered its enthusiasm for the upcoming strategy title, noting that “it's more like The Sims... it's a title that we hope to revisit sometime in the future.”]