EA Learns Lesson From Rough Holiday '08, Will Spread Out Releases This Fiscal Year

Holiday 2008 was rough for Electronic Arts. Major new titles didn't meet expectations, and the shortfalls were a precursor to widespread layoffs and studio closures. Even into the June quarter, EA is still wrapping up staff reductions, as the number of overall employees slimmed from 9,106 employees to 8,948 quarter-on-quarter. EA CEO John Riccitiello doesn't want to repeat the same mistakes this holiday. He noted in an earnings call on Tuesday, "It was a very difficult retail environment [in 2008]", and EA released new properties "right on top of some very strong competitive launches." He added that he was "less than pleased" with EA's marketing during holiday 2008. But the chief exec believes EA is on track to snuff out those inefficiencies this time around. "We're addressing all those issues ... in particular with Brutal Legend and Dragon Age." He expressed how Dragon Age has a "built-in audience" made up of fans of the game's developer, BioWare, and said Brutal Legend from Double Fine is "one of the most unique" franchises he's seen in a long time. "One of the learnings we had from FY09 was that we bunched up too much into the Q3 quarter (October-December). Where some of our titles crowded out the competition, they were crowded out by other EA titles." "...A year ago, when we had one major release in FYQ4 -- we [now] have four major releases in Q4 (January-March). We really put together a plan that is designed to take advantage of the fact that there are 12 months in a year, and we think we can actually do better with our key titles by spacing them out." As for two of last year's key properties that EA introduced during the busy holiday quarter in 2008, they haven't performed as poorly as some perceive, Riccitiello said. "On lifetime unit [sales], both Dead Space and Mirror’s Edge are solid businesses for us. They just didn’t meet the expectations we had in fiscal 2009." What won't be part of EA's current fiscal year are sales of games that are compatible with Microsoft's Project Natal camera or Sony's motion-sensing control solution. But EA will be there when they arrive, Riccitiello said. "We're really positive on both. Our view is that motion-based gaming is something that is going to both drive installed base and drive interest and drive growth." He said EA plans to support both controllers when they hit the market, but will introduce specific support "likely in early- to mid-2010, instead of jumping the gun on that."