Electronic Arts: Holiday Sales Bad For Us, Too (ERTS)

Electronic Arts (ERTS) joins the club by warning that it’s going to miss fiscal 2009 net revenue and earnings estimates.

“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,” said John Riccitiello, Chief Executive Officer, in a statement.

EA will keep cutting costs, including cutting its product portfolio for fiscal 2010 — including more layoffs.

There’s been talk that video games, as cheap entertainment, are somehow immune from the broader economic downturn. A few even predict the gaming industry is counter-cyclical as more people stay home.


Games are indeed cheap entertainment, and proven goods like World of Warcraft will continue to do well. But as gamers face tough times, they’ll be less likely to splurge on marginal games, preferring to stick with games they know they’ll like.

And for EA specifically, the recession means the company will find it a lot harder to sell owners of “Madden NFL 08” a $60 copy of “Madden NFL 09.”

See Also:
EA Q2: Earnings Guidance Weak, Company Laying Off 6%
Electronic Arts Blows Q1, Q2 Guidance. But Core Business Up

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