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Next-gen demand can't replace current-gen shortfall for EA
Next-gen demand can't replace current-gen shortfall for EA
January 28, 2014 | By Christian Nutt




Today EA announced its third quarter 2013 financial results, which ended December 31 and thus includes the launches of the PlayStation 4 and Xbox One. So how'd that go?

The good news for EA is that it carved out a huge percentage of the software market share for those devices. EA says it was the number one next-gen publisher in the Western market, capturing 35 percent of software sales for PlayStation 4 and Xbox One. The bad news, however, is that sales of next-gen titles can't make up for the drop-off in demand for current-gen titles.

Year-on-year, the company's Q3 revenues for Xbox 360 and PlayStation 3 games dropped from $566 million to $425 million -- 25 percent -- yet next-gen games generated only $24 million for the company. Revenue for PC games was slightly up (13 percent) and overall console game revenues were down 22 percent overall, year-on-year.

This jibes with data out of GameStop, which said that sales of new software took a hit during the same period, as sales of next-gen titles were unable to offset the downward trend in current-gen game sales.

Mobile revenues went up 13 percent, however; The Simpsons Tapped Out has generated over $130 million in revenue since its launch, the company revealed. That didn't make for a big change in its handheld/mobile numbers, which were largely flat when decreases in handheld console games are taken into account.

The silver lining: Overall digital revenues were up 27 percent year-over-year, to $517 million.

For the quarter, the company saw a net loss of $308 million. This bad news is offset, it says, by increased operating efficiencies leading to better profit potential, and its digital and next-gen initiatives. All the same, the company is lowering its full-year revenue guidance to $3.91 billion thanks to that weakness in demand for current-generation software.

Shares in EA took a slight tumble in aftermarket trading but quickly rebounded to $24.25 -- still a 2.49 percent drop -- at time of posting.


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