Ea have revealed that holiday sales performance for the current slate of recently released games has not met expectations and, as a result, cost-cutting actions will have to be taken.
The cutting involves dropping planned titles from its release schedule next year, while the reduction of EA headcount and the need to consolidate studios was also mentioned. EA CEO John Riccitiello said of the results:
“While we saw significant improvement in the overall quality of our key products this year, we are disappointed that our holiday slate is not meeting our sales expectations. While we are cutting costs, we remain committed to investing in great game quality, in new properties and in our direct-to-consumer initiatives. We will be launching several new titles and online games in fiscal 2010.”
Riccitiello pointed out in a conference call that although 17 EA titles had received a Metacritic review average of 80 or higher, the increase in the titles’ respective quality had not been successfully translated into increases in sales. Instead, while remaining committed to quality, EA will focus on investing in titles with greater “hit potential,’ while also focussing on games with strong online features. Riccitiello continued his assessment of EA’s current intellectual property (IP):
“We’re very pleased with a lot of our new franchises this year. Spore… [looks like an] ongoing franchise, Dead Space looks like a long-term big winner for us… Warhammer will continue to perform very well. Mirror’s Edge was very strongly reviewed… we’ll be looking at some issues around the design to make sure that strong IP is married with strong business.”
”Many times, what happens with new IP is the first edition doesn’t generate the units that subsequent editions could generate. In this particular year, the consumer might have been more reticent to take risks than they might otherwise be, and it was a very crowded holiday.”
Riccitiello also noted that EA’s December revenue will be hurt by cautious retailers ordering less inventory in the wake of a failing economy.
This news arrives after it was announced earlier this year that EA were laying off roughly 600 people from their worldwide studios as well as consolidating their Casual division , on the back of incredible net losses.