EA Lost More Money In Three Months Than You'll Ever Make

[ZombieGenesis]

I'm not even going to pretend to understand how someone can publish as much crap (MASSIVELY popular, well selling crap mind) as EA does and still make a three-hundred million loss.

 

[D_987]

hm. This is also why no less DRM on games can be profitable as you don't need to spend much on the servers or third-party companies like Sony (DADC) to create it for you.

I don't think DRM has anything to do with the situation...

I have a feeling The Old Republic is probably the biggest culprit in this.
It's a huge budget of a game, and if it fails, EA could be done.

Let's not over-exaggerate, EA might stop releasing new IP's [See Mirrors Edge, Dead Space, Dante's Inferno] but their sports games alone are selling in extremely high numbers, with little changes, year in, year out.

 

[Weaver]

Oh no we ONLY made $1.053 billion instead of $1.243 billion! It must be those damn pirates! How can a company humbly survive of a measly billion dollars of revenue???

 

[McNinja]

I think it has something to do with The Old Republic. Didn't the game cost around $300 Million to make?

Also, once they get a well-made MMO out there, with the subscription, they will turn a profit.

hopefully this is true. by the looks of it they have at least a game purchase plus a month or two minimum from me.

I hope this doesnt allow apple to buy them out, that would be devistating the gaming industry

i might die if this happened

I might as well.

As for SW:TOR in terms of making money: just roll with this for a bit: 1 million people buy the game. That's $60,000,000. Then add in the subscription for three months. Tis makes it $120,000,000. The game will have to run with at least one million players for more than one full year to make up for the money it took to create it.

I'm sure there will be more than 1,000,000 people who buy the game and subscribe on launch, so I'll do more numbers then.

 

[Zero_ctrl]

I have a feeling The Old Republic is probably the biggest culprit in this.
It's a huge budget of a game, and if it fails, EA could be done.

Let's not over-exaggerate, EA might stop releasing new IP's [See Mirrors Edge, Dead Space, Dante's Inferno] but their sports games alone as selling in extremely high numbers, with little changes, year in, year out.

I worded that incorrectly.
But yeah, that's basically what I was going for.

They'll have to stop taking as big of risks.

 

[Alade]

So apparently the escapist claims I won't earn 332 million dollars in my whole life, easy challenge accepted.

 

[SovietSecrets]

Medal of Honor is probably what killed them. Though NFS was pretty awesome, so they are forgiven for MoH.

 

[RollForInitiative]

Well hopefully when Old republic gets released they will make up for it ASSUMING BIOWARE RELEASES IT IN THE NEXT DECADE

Oh, we will. I wouldn't worry about that.

 

[Daemascus]

I'm not even going to pretend to understand how someone can publish as much crap (MASSIVELY popular, well selling crap mind) as EA does and still make a three-hundred million loss.

Popular, well selling. Words not usualy associated with crap...

 

[JeanLuc761]

Oh no we ONLY made $1.053 billion instead of $1.243 billion! It must be those damn pirates! How can a company humbly survive of a measly billion dollars of revenue???

EA is huge, but a $332,000,000 loss is massive, no matter who you are. They lost nearly 25% of their revenue, which means they'll be unable to take as many risks in the near future.

 

[JeanLuc761]

I'm not even going to pretend to understand how someone can publish as much crap (MASSIVELY popular, well selling crap mind) as EA does and still make a three-hundred million loss.

So Dead Space, Crysis, Need for Speed, Burnout, Battlefield, Dragon Age, Mass Effect and all their sports games are all crap?

News to me.

 

[Hosker]

Now I am going to make it a priority to earn $322 million dollars just to prove this thread wrong.

EA are a big company; that amount is probably pocket change to them ... probably.

 

[CJ1145]

Piracy's fault.....

Hey, it's what they'll blame...

Can you blame them for blaming it?

But yeah, seriously. Comparing EA to Activision is like comparing Scrooge McDuck to plain ol' Ebenezer Scrooge. They're both money-hoarding entrepreneurs, but at least McDuck's a decent guy. Scrooge was pretty much the devil as a businessman before his little trip with the ghosts.

 

[Weaver]

Oh no we ONLY made $1.053 billion instead of $1.243 billion! It must be those damn pirates! How can a company humbly survive of a measly billion dollars of revenue???

EA is huge, but a $332,000,000 loss is massive, no matter who you are. They lost nearly 25% of their revenue, which means they'll be unable to take as many risks in the near future.

Right, but they lost revenue. It's not like they're operating in the red, they still MADE a billion dollars.

I never got why business assume they can just infinitely grow and their profits will always "gain". If you think of the world on a macro level, there is only so much money and so many people willing to spend it. Sometimes you're up some times your down, so long as it's a positive revenue stream after operational costs I fail to see what the deal is.

 

[dancinginfernal]

Well hopefully when Old republic gets released they will make up for it ASSUMING BIOWARE RELEASES IT IN THE NEXT DECADE

IT'S SO CLOSE, YET SO FAR.

OT: Yikes, that's going to leave a mark. A considerable one.

 

[anian]

It's kind of hard to tell what these numbers mean. If indeed such things as investment in future projects aren't considered, then the numbers are basically meaningless.

Might be this is just publicity, getting the name out. They have Bad company 2, Dead space 2, new Battlefield, new Dragon age and Mass Effect are coming really soon, they'll make up the money. <-- see that, publicity

 

[gmaverick019_v1legacy]

I think it has something to do with The Old Republic. Didn't the game cost around $300 Million to make?

Also, once they get a well-made MMO out there, with the subscription, they will turn a profit.

hopefully this is true. by the looks of it they have at least a game purchase plus a month or two minimum from me.

I hope this doesnt allow apple to buy them out, that would be devistating the gaming industry

i might die if this happened

I might as well.

As for SW:TOR in terms of making money: just roll with this for a bit: 1 million people buy the game. That's $60,000,000. Then add in the subscription for three months. Tis makes it $120,000,000. The game will have to run with at least one million players for more than one full year to make up for the money it took to create it.

I'm sure there will be more than 1,000,000 people who buy the game and subscribe on launch, so I'll do more numbers then.

well just estimating a bit more, mass effect 2 sold over 2 million copies in the first week(i realize thats collective, being multi platformed, but just using it as a number).

so with that

2,000,000 - games sold
$120,000,000
three months for each person
$240,000,000


now thats all spitballing, but just saying, kotor had a decent sized fanbase (look at the mods alone) and if people love bioware as much as alot of them have been spouting, those COULD be accurate assumptions (notice i said could, not that they were or anywhere close)

 

[aPod]

Oh no we ONLY made $1.053 billion instead of $1.243 billion! It must be those damn pirates! How can a company humbly survive of a measly billion dollars of revenue???

EA is huge, but a $332,000,000 loss is massive, no matter who you are. They lost nearly 25% of their revenue, which means they'll be unable to take as many risks in the near future.

Right, but they lost revenue. It's not like they're operating in the red, they still MADE a billion dollars.

I never got why business assume they can just infinitely grow and their profits will always "gain". If you think of the world on a macro level, there is only so much money and so many people willing to spend it. Sometimes you're up some times your down, so long as it's a positive revenue stream after operational costs I fail to see what the deal is.

This is what has always confused me. When someone reports a loss of revenue as compared to the prior quarter it's not an actual loss of money but a loss in profit margin. Right?

Someone please explain that for me i'd appreciate it.

 

[Weaver]

Oh no we ONLY made $1.053 billion instead of $1.243 billion! It must be those damn pirates! How can a company humbly survive of a measly billion dollars of revenue???

EA is huge, but a $332,000,000 loss is massive, no matter who you are. They lost nearly 25% of their revenue, which means they'll be unable to take as many risks in the near future.

Right, but they lost revenue. It's not like they're operating in the red, they still MADE a billion dollars.

I never got why business assume they can just infinitely grow and their profits will always "gain". If you think of the world on a macro level, there is only so much money and so many people willing to spend it. Sometimes you're up some times your down, so long as it's a positive revenue stream after operational costs I fail to see what the deal is.

This is what has always confused me. When someone reports a loss of revenue as compared to the prior quarter it's not an actual loss of money but a loss in profit margin. Right?

Someone please explain that for me i'd appreciate it.

This is what I thought as well. Maybe I'm like WAY off the mark, I just program computers I don't deal with the business end of things in real life, never even took an econ class.