EA hit by poor Christmas sales performance

Electronic Arts, the world's biggest computer games publisher, on Tuesday reported sales and profits fell compared to a year earlier in its key holiday season quarter - reports the FT (UK).

EA said sales fell 3.2 per cent to $1.428bn (Q3 2003: $1.475bn) and net profits were down 4.4 per cent at $375m. Diluted earnings per share of $1.18 were at the top of its guidance and met market expectations.

The best-selling games of 2004 were Grand Theft Auto: San Andreas from Take-Two, which sold more than 5.1m copies, and Microsoft's Halo 2 with more than 4.2m sold, according to the NPD research group. EA said its best-selling games in the period included Need for Speed Underground 2, FIFA 2005, The Lord of the Rings and Sims in the City. The Sims was its biggest franchise selling more than 16m copies in the calendar year. But EA released only 11 titles in the third quarter ending December 31 compared with 13 a year earlier.

Chief financial officer, Warren Jenson, said: “We think 2005 will be a defining year, with new platforms coming out such as the [handheld] Nintendo DS and [Sony] PSP and the possibility of next-generation consoles.”

Sales in North America were down 8 per cent at $692m, but up 1 per cent at $666m in Europe and up 9 per cent to $70m in Asia.

EA said it foresaw consolidation in the industry but did not hint at any immediate acquistions. It agreed to buy a 20 per cent stake in French publisher Ubisoft during the quarter, but Mr Jenson said EA was keeping its options open. “We could seek a controlling interest, it's also possible that we would sell our shares.”

Thanks to `KT` for the alert.

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