EA strong earnings overshadowed by big 'Star Wars' loss
Game publisher loses nearly half a million subscribers of Star Wars: The Old Republic, but overall numbers for the year beat expectations.
Electronic Arts announced solid financial results today, including fourth quarter net income gains of $400 million -- a rather sizable difference compared to $151 million in same quarter last year. The massive gaming company pegged revenue for the quarter at $1.37 billion, a figure several hundred million higher than the year before.
EA's net income for the year ending March 31 amounted to $76 million, perhaps an uplifting number in comparison to the $276 million loss in 2011. Total revenue for the 2012 fiscal year amounted to a staggering $4.1 billion, up from $3.5 billion a year prior. Revenue strictly from digital content rose to $1.2 billion, an increase of nearly 47 percent in comparison to 2011. Investors seem wary of EA's projected 2013 earnings, though, as MarketWatch points out, the assumed revenue for the future falls below expectations.
An EA representative confirmed in an earnings call that the massively multiplayer online role-playing game (MMORPG) currently entertains 1.3 million subscribers, a substantial drop from the 1.7 million announced back in February. Sales of the game crested upwards to 2.4 million units sold. The official reason for the loss in population falls on "casual and trial players cycling out of the subscriber base, driving up the overall percentage of paying subscribers," said Ken Barker, a senior vice president and chief accounting officer at EA.
Barker continued by stating that Star Wars remains "consistent with the original assumptions we made when we acquired BioWare in 2008," but "only represents a mid-single digit percent of our total profitability in fiscal '13."
EA also announced plans to invest $80 million in the development of games for the next generation of gaming consoles, which include the Wii U and the eventual successors to the PlayStation 3 and Xbox 360.
In after-hours trading, Electronic Arts shares coasted downwards nearly 5 percent to $14.38 due to a weakened forecast and disappointing loss of players in Star Wars.