Electronic Arts to shut down 12 offices

By Ellie Gibson Published 4 February, 2009

Following USD 641 million loss.

Electronic Arts has announced plans to shut down 12 facilities and make 11 per cent of its workforce redundant - amounting to 1100 members of staff.

The news comes after the publisher released a financial report for the third quarter, showing a USD 641 million loss. That's a big old increase over the loss for the same quarter last year, which stood at USD 33 million.

The redundancies will affect everyone from low-level staff and managers to directors and VPs, according to EA, in locations around the globe. The company is also planning to take advantage of more low-cost locations, and has reduced the number of games in its portfolio to 50 for the 2010 financial year.

CEO John Riccitiello described the results as "a clear disappointment", admitting that EA didn't make as much money at Christmas as had been expected. However, he continued, it wasn't for want of trying.

"We delivered on game quality and innovation in calendar 2008, with 13 titles rated 80 or above - more than any third-party publisher," said the EA boss.

"We expect to build on this great quality record in the year ahead while delivering more profitability."

The best-selling EA game of the quarter was FIFA 09 with 7.8 million copies shifted. Need for Speed Undercover also did well (5.2 million), as did Littlest Pet Shop (2.8 million).

The company also reported that MMO Warhammer Online ended the quarter with 300,000 paying subscribers.

Picture of Ellie.

About Ellie Gibson

Since joining Eurogamer in the mid 2000s, Ellie has written about subjects as diverse as the fall of Gizmondo, the rise of Hollyoaks actresses in Red Alert games and the noise a bear makes under NSFW circumstances.

Read more articles from Ellie by visiting the Ellie Gibson archive page.

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Comments (36) Latest comment 3 years ago

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  • munki83 #1 3 years ago

    Poor EA :(

  • WickedDeeJ #2 3 years ago

    I wonder how long until the board realizes, that Ricitiello doing things like calling all the DRM-skeptic gamers either pirates or stupid, is part of the reason for some of this. Bad public image, EA.If you want people to spend money on your products, do not antagonize them.
    Edited by 1 at 04/02/09 @ 08:34

  • bad09 #3 3 years ago

    You know what, EA went from awesome back in the day to crap, crap crap and then back again.

    They really impressed in 2008. Their sports games were massive improvements not just updates, Dead Space rocked and really did not deserve the slip down the chart, Mirrors Edge is quite special to I found out recently, and BO: P is really good (even tho they killed the crash levels). EA gave me a good 2008.

    I actually feel sorry for them. It's like FR, they made that turd Haze but go under just as a special looking BF3 was emerging :(

    Still EA are big enough I doubt it will hurt that much (and I 'll still see more DS and ME)

  • Pirotic #4 3 years ago

    I seriously doubt that the vast majority of EA customers are even aware of the DRM issue, let alone clued up enough to boycott them. Too many good games came out at the same time this Christmas, and in that circumstance a lot of 'decent' EA games got totally overlooked and ended up performing badly.

    I respect EA for trying harder, when Fifa, NFS and that bloody Pet Shop game are it's top sellers it makes you wonder why they still bother publishing the more artistic games which us lot tend enjoy. I suspect many of the games 'axed' would fall under this category.

  • thesombrerokid #5 3 years ago

    EA in 'turns out ditching whole pc gaming community in favor of consoles did affect our bottom line shocker'!

  • Quint2020 #6 3 years ago

    I thought games like Dead Space did really well?

  • penhalion #7 3 years ago

    "We delivered on game quality and innovation in calendar 2008, with 13 titles rated 80 or above - more than any third-party publisher," said the EA boss.

    A good example of what I have been saying about gamers simply not listening to the ratings from reviewers anymore. It's the old saying "fool me once, shame on you. Fool me twice, shame on me!". There are simply too many examples of games being rated 80% and turning out to be 4 hours long, having overhyped gameplay etc.etc. Just look at the media hype that was around Assasins Creed or even Haze. If the reviewers had really played and seen the previews they claim, then how in the name of sanity did they hype those games so much?

    I think games publishers will start to see that creating an actively trying to sustain review system based on false hype has finally come back to bite them in the arse. No-one is willing to trust the scores and so are simply not buying the hyped games in the quantities they use to. Just look at the mess EG itself got into over it's killzone 2 exclusive.

    This kind of false hyping is unsustainable. With each new incident gamers will only get more cynical and less willing to trust the scores. You can pretty much ignore the fanboy score arguments. Those are just a side effect of the process, because fanboys are seeing the sales of these hyped games going down, their warped logic tells them it must be because the game didn't get a 10/10.

    :quick edit for grammar
    Edited by 1 at 04/02/09 @ 10:09

  • the_mtfr #8 3 years ago

    It's the spirits of the dead warriors at Bullfrog, Origin and Westwood that took revenge on EA.
    Edited by 1 at 04/02/09 @ 08:54

  • UncleLou #9 3 years ago

    You have to wonder what exactly is going on when in a constantly growing industry with billions of turnover, almost everyone seems to make losses.

  • thesombrerokid #10 3 years ago

    @penhalion
    "fool me once, shame on me. Fool me twice, shame on you!"

    did you mean to get that the wrong way round?

  • rhubarbandcustard #11 3 years ago

    EA haters will dance with joy should EA go the wall.

    I've always supported EA with my hard earned money. They produce great games.

    EA haters are bad people. As are most gamers in general.

    (To back up this statement, browse any gaming forum on the internet)

  • Inigo #12 3 years ago

    Its a shame. EA have been trying to make good games but they don't seem to sell.

    I hope this doesn't effect Bioware when Ricitiello finally gets kicked out.

  • Vice.Destroyer #13 3 years ago

    I respect EA for trying harder, when Fifa, NFS and that bloody Pet Shop game are it's top sellers it makes you wonder why they still bother publishing the more artistic games which us lot tend enjoy.

    Amen to that, brother. Granted, I haven't bought any EA games in 36 months, but the games that came out last year, seemed to be much better than usual. Just as someone said, in a year that there are record profits in the games market and EA has their bravest year in terms of original IP, they make a loss.

    If they go back to making half-baked games and updates, and end up making major profits like before, we'll have nobody to blame but ourselves. Not likely that they will make huge profits on half-baked updates, you say? Look at their top sellers.

  • metalangel #14 3 years ago

    Sorry, I won't blame myself for letting EA become shit again because I didn't buy Mirror's Edge at full price and essentially pay £10 per hour of gameplay. Besides, they will make all their losses back when The Sims 3 comes out, and even more off the expansions to give us all the items we enjoyed in the first two games.

  • UncleLou #15 3 years ago

    If they go back to making half-baked games and updates, and end up making major profits like before, we'll have nobody to blame but ourselves

    Well, no, I'll blame you*. I think I've bought at least 6 EA games in the last 12 months. ;)

    *and metalangel, of course
    Edited by 1 at 04/02/09 @ 09:20

  • lambtron #16 3 years ago

    There is no justice in the world.

    They churned out shit for years and made a packet. Now they're finally making good games and they're losing money :(.

  • Sunyavadin #17 3 years ago

    Anything that highlights the flaw in banking on endlessly churning out unimaginitive sequels packed with hopelessly broken DRM, is doing a good thing. 641 million dollar losses, I salute you!

    Now, bitches. Invest your money more wisely, like in making games like Mirror's Edge longer.
    Edited by 1 at 04/02/09 @ 09:49

  • LiamK #18 3 years ago

    So they've lost money purely because they used DRM and made Mirror's Edge too short? Huh.

  • penhalion #19 3 years ago

    @thesombrerokid

    Nope I just typed it too fast :)

  • MoFo #20 3 years ago

    Well from what I hear of the perks and pay packets EA staff can get it's hardly surprising they're making a loss.

  • Eraysor #21 3 years ago

    IF EA keeps making a loss we're going to end up with more than four different versions of NFS on our hands...

  • rhubarbandcustard #22 3 years ago

    With reference to MoFo's comment:

    http://mo ney.cnn.com/galleries/2007/fort...

  • AphoticCosmos #23 3 years ago

    Anything that highlights the flaw in banking on endlessly churning out unimaginitive sequels packed with hopelessly broken DRM, is doing a good thing. 641 million dollar losses, I salute you!

    Now, bitches. Invest your money more wisely, like in making games like Mirror's Edge longer.



    Ironically, and sadly, it's those unimaginative sequels and sports games that make EA it's money, so that it can fund it's art-house pet projects like ME2, Dead Space, Mirror's Edge, etc. that the hardcore gaming community love so much, but are ignored by the epic fails of humanity that find kicking a virtual football more entertaining than a real one [you know who I'm talking about, chavs et al]

    I'm loving Dead Space at the moment - just like BioShock it's exhausting to play though so I do it in 30m-1hr chunks - and I loved Crysis, Crysis Warhead and Spore, but EA has to sadly balance up the handful of good new games with the unpolished turds produced by EA Sports.
    Edited by 1 at 04/02/09 @ 10:26

  • rhubarbandcustard #24 3 years ago

    AphoticCosmos: You are blinded by hate.

    http://www.easports.com/

  • macmurphy #25 3 years ago

    I worked for a company that worked for EA promoting their games. I always used to hear about the EA bohemoth that was killing small developers and to be fair they produce a lot of shit - Littlest Pet Shop, Family Game Night, Celebrity Sports Showdown (which was actually quite compelling for half hour stints).

    But sadly in today's world these are the games that sell. Critics whined about NFS but it did a rakeload of business and most importantly, people really liked it. You would be amazed how often people come up to me with nothing but good things to say about that game. It's consistently critically mauled but consistently sells well, which says a lot about the gaps between what critics think are good and what punters want.

    All that aside, they made the best football game ever (FIFA - best selling game of last year, crtically lauded), Madden did the same in the states, Burnout Paradise, Tiger, Deadspace, Red Alert, Mirror's Edge they published Left for Dead for Valve, Crysis Warhead. They made a lot of great games (anyone who says EA sports dropped the ball is a nugget). This year they will focus on the DS and Wii and try and bring more adult titles to those platforms.

    EA are big and don't produce the kind of unloved gems that will win over the kind of fanbase that comes on here. They have consistently produced the games that sell well, and you can't knock them for giving people what they want. It's ironic that in a year when they produce the kind of games that gamers will enjoy they find their profits dwindling.

    EDIT: Ironic is not the right word. It's a clear sign that selling a lot of games is not always related to getting good reviews, and that the gaming community is not always in touch with what the wider public want. Also it sounds like I'm noshing off EA. I just play games and am resistant to the hatred that comes their way. Burnout, Left for Dead and Fifa were three of my favourite games last year. Looking forward to getting my hands on Red Alert. They deserve a break.
    Edited by 1 at 04/02/09 @ 11:06

  • UncleLou #26 3 years ago

    You would be amazed how often people come up to me with nothing but good things to say about that game. It's consistently critically mauled but consistently sells well, which says a lot about the gaps between what critics think are good and what punters want.


    Or, alternatively, many don't know that there's better stuff out. I loved NfS: Most Wanted, but do people really like the latest NfS? Appaling framerate and all? And would they still love it if they were aware of Burnout, or Midnight Club?

  • Spekingur #27 3 years ago

    @penhalion: So, you thought Assassin's Creed was a bad game? For me, Assassin's Creed lived up to its claims. Plus, it's from Ubisoft, not EA - also known as the Saviour Game for Ubisoft, since at the time it was released Ubisoft was looking like they were going under.

  • Freek #28 3 years ago

    Quality up, proffits down.

    That has to suck big time.

  • schnide #29 3 years ago

    I read EG at work so I usually have my IE windows in a narrow box to the side of my screen. Sometimes I don't read all the headlines properly. Usually I can figure it out, but for a very, very brief second this item read as..

    Electronic Arts to shut down.

    Need I say more?

  • rhubarbandcustard #30 3 years ago

    snide: Need you say more? Well, yes.

    Unless, your point is that you have a job despite having the reading comprehension skills of a 5 year old and so are prone to error.

  • WhyMeeeeee #31 3 years ago

    They think it's to do with overheads.
    in fact its to do with unoriginal crappy yearly churned out updates

  • dirk_aircool #32 3 years ago

    I dont understand how EA can cut such a large percent of its workforce because it lost money in a finacial quater . it lost money they year before in same quater so why shed jobs this year . a loss is a loss . and its only a 'loss' for that quater . what are the year toalal profits? its like chopping your leg off to fix an ingrowing toenail . your crippling your companies ability for the future .
    sounds like an excuse to me and I feel sorry for the poor sods how are now wondering how they will feed the kids and keep their house . ( or maby keep repayments on Ferrari , go on . sell the kids ).
    NFS in 4 flavours .? please god nooooo.
    Edited by 1 at 04/02/09 @ 12:39

  • cherryuk #33 3 years ago

    You need to be more creative, EA you can't rely on yearly sequels

  • coolbritannia #34 3 years ago

    rhubarb, you're a prick. he made a funny, i lol'd.

  • rhubarbandcustard #35 3 years ago

    coolbritannia: You lol'd at the thought of several thousand people losing their jobs.

    Are you a sociopath?

  • the_mtfr #36 3 years ago

    @rhubarb, you cannot be a radical socialist and want to protect the company's existence at all costs. Ideally the companies rise and fall according to the quality they provide on the market and because of their competition. So if a company closes and people lose their jobs, it's not the end of the world. I'd rather have that, than artificially keep a big company alive, incapable of sustaining its existence through quality. So I don't think you have to be a sociopath to laugh at some company closing.

    Edit: ...though I realize in this industry quality != profit... I'm too lazy to think it over and too emotionally attached to the letters to delete them :D
    Edited by 1 at 05/02/09 @ 12:32