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EA Earnings

Preliminary Electronic Arts Q2 FY14 Financial Results are online, showing what they describe as "strong" results, as they say: "For the quarter, non-GAAP net revenue of $1,040 million was above our guidance of $975 million. Non-GAAP diluted earnings per share of $0.33 was above our guidance of $0.12." A post-earnings conference call will get underway shortly. "EA's strong second quarter was driven by great title launches, continued digital growth, and financial discipline," said Chief Executive Officer Andrew Wilson. "While we have made good progress in the first half of the year, we remain focused on executing our FY14 plan and delivering a full slate of amazing games and services to players on current and next-generation consoles, mobile, and PC."

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18. Re: EA Earnings Oct 30, 2013, 22:03 BobBob
 
NKD wrote on Oct 30, 2013, 18:31:
Yes, let's never fire anyone because it might mean temporary financial hardship for a family which might not be understandable to a five year old. You have great business acumen sir.

It's not always temporary. It's still ongoing these days. Better to over-work a few people than to plan out mass lay offs that will destroy families. Lay offs go beyond economic hurdles, they are psychologically disruptive; the ramifications lasting years. After a few lays offs, it's near impossible to find employees that care about anything but the next pay-check, knowing full well it may be the last one.

This comment was edited on Oct 30, 2013, 22:24.
 
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17. Re: EA Earnings Oct 30, 2013, 18:38 Beamer
 
NKD wrote on Oct 30, 2013, 18:31:
BobBob wrote on Oct 30, 2013, 14:34:
NKD wrote on Oct 29, 2013, 22:10:
Layoffs are a necessity, and the people who get laid off should be the ones you don't need. And generally companies aren't overstaffed with executive positions.

Feel free to explain this to little Susie and Johnny as their family goes on food stamps; meanwhile, they see other kid's parents (the same executives who fired mom or dad) driving BMWs.

Yes, let's never fire anyone because it might mean temporary financial hardship for a family which might not be understandable to a five year old. You have great business acumen sir.

The whole ramping-up/ramping-down thing is a bit overdone at the moment. At least, the whole "well, that failed, shut the studio down" concept. You let too much talent walk out the door. Then again, I suppose the argument is that the lower level people are fairly dime-a-dozen these days and if the higher level people (e.g., the producers and designers) fail, well, it's easier to lay off a studio than fire the brains in it because the end result is the same.

But it is understandable why studios ramp up and ramp down, even if many don't get it. For a small studio, they're only working on one game at a time, and the final few months are all hands on deck.
But what about after release?
Well, you need some tech people around for support. And you need some of every role for DLC. Other than that, though, a new game is being developed, and for a few months it's really just the tech team working on new features, the designer working on new ideas, the concept artists doing sketches, etc. Almost everyone else is idled for 3-5 months, which is costly.
A bigger studio can plan around this with waves - there is already a second project in the works so those idled can just move in to the other team as it ramps up, but for smaller studios they just have little to do. If the studio has money this can be time for them to get creative with new ideas. If it doesn't...
 
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16. Re: EA Earnings Oct 30, 2013, 18:31 NKD
 
BobBob wrote on Oct 30, 2013, 14:34:
NKD wrote on Oct 29, 2013, 22:10:
Layoffs are a necessity, and the people who get laid off should be the ones you don't need. And generally companies aren't overstaffed with executive positions.

Feel free to explain this to little Susie and Johnny as their family goes on food stamps; meanwhile, they see other kid's parents (the same executives who fired mom or dad) driving BMWs.

Yes, let's never fire anyone because it might mean temporary financial hardship for a family which might not be understandable to a five year old. You have great business acumen sir.
 
Avatar 43041
 
If you don't like where gaming is heading, stop giving your money to the people who are taking it in that direction.
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15. Re: EA Earnings Oct 30, 2013, 14:34 BobBob
 
NKD wrote on Oct 29, 2013, 22:10:
Layoffs are a necessity, and the people who get laid off should be the ones you don't need. And generally companies aren't overstaffed with executive positions.

Feel free to explain this to little Susie and Johnny as their family goes on food stamps; meanwhile, they see other kid's parents (the same executives who fired mom or dad) driving BMWs.

This comment was edited on Oct 30, 2013, 15:07.
 
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14. Re: EA Earnings Oct 29, 2013, 23:29 killer_roach
 
HorrorScope wrote on Oct 29, 2013, 23:21:
You're right. But it's loss after loss for a long time now...And Gaap or no Gaap Revenue is Revenue and overall it is down YOY. Not sure what's so exciting about that? No? And if one doesn't want to touch that... We still can babble about overall revenue per platform, that's still fun to do???

They've spent 2008-11 expanding and from there on trying to shed the weight they put on... I'd say the trajectory is a healthier one.

As for the declining revenue, you have to keep two things in mind - one, their smaller size means they aren't releasing as many games anymore, and two, Madden 25 was a bit of a sales disappointment for them.

I'd still say the trajectory is positive, but you are right in the fact that they're basically right now having to undo years of costly mistakes.
 
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13. Re: EA Earnings Oct 29, 2013, 23:21 HorrorScope
 
killer_roach wrote on Oct 29, 2013, 23:17:
HorrorScope wrote on Oct 29, 2013, 21:48:
Strong Results?

695 Million in sales for the quarter, slightly lower than last year.
Throw in expenses...
273 Million Dollar LOSS (Last Year 381 Loss)

Xbox Rev - 167 Mil
PS3 Rev - 131 Mil
PC Rev - 274 Mil (And we still don't get some sports games)
Wii rev $32 dollars, lol. jk

YOY the consoles down 15%.
PC up again at, what is that you say, oh my 28%!

Oh yes and the Holy Mobile market 75 Milion. FLAT YOY. LOL!!

I wouldn't say these are great #'s overall. Seems like they should be bowing to PC gamers demands.

When GAAP and non-GAAP numbers vary that wildly, that's a sign of major accounting charges, as is a sign of a company that's restructuring. This shouldn't come as a surprise when they've closed studios and laid off staff, that's basically where the numbers diverge. As a result, there's a reason why they're focusing more on non-GAAP numbers and why investors are taking the earnings report as very good news. After all, once those charges are past them, it's putting them in a better situation going forward.

Additionally, there's reasons why gamers should probably avoid the business side of things. Most of them seem to know precious little about it.

You're right. But it's loss after loss for a long time now...And Gaap or no Gaap Revenue is Revenue and overall it is down YOY. Not sure what's so exciting about that? No? And if one doesn't want to touch that... We still can babble about overall revenue per platform, that's still fun to do???
 
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12. Re: EA Earnings Oct 29, 2013, 23:17 killer_roach
 
HorrorScope wrote on Oct 29, 2013, 21:48:
Strong Results?

695 Million in sales for the quarter, slightly lower than last year.
Throw in expenses...
273 Million Dollar LOSS (Last Year 381 Loss)

Xbox Rev - 167 Mil
PS3 Rev - 131 Mil
PC Rev - 274 Mil (And we still don't get some sports games)
Wii rev $32 dollars, lol. jk

YOY the consoles down 15%.
PC up again at, what is that you say, oh my 28%!

Oh yes and the Holy Mobile market 75 Milion. FLAT YOY. LOL!!

I wouldn't say these are great #'s overall. Seems like they should be bowing to PC gamers demands.

When GAAP and non-GAAP numbers vary that wildly, that's a sign of major accounting charges, as is a sign of a company that's restructuring. This shouldn't come as a surprise when they've closed studios and laid off staff, that's basically where the numbers diverge. As a result, there's a reason why they're focusing more on non-GAAP numbers and why investors are taking the earnings report as very good news. After all, once those charges are past them, it's putting them in a better situation going forward.

Additionally, there's reasons why gamers should probably avoid the business side of things. Most of them seem to know precious little about it.
 
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11. Re: EA Earnings Oct 29, 2013, 22:25 HorrorScope
 
NKD wrote on Oct 29, 2013, 22:10:
HorrorScope wrote on Oct 29, 2013, 21:34:
NKD wrote on Oct 29, 2013, 19:59:
If you have more workers than you need, then yes, the problem is the workers.

Sounds like a management issue to me.

It's the nature of the beast. Software companies, especially games, have erratic staffing needs as projects come and go. There's little anyone in management can do about that.

Layoffs are a necessity, and the people who get laid off should be the ones you don't need. And generally companies aren't overstaffed with executive positions.

Right, but it's not a worker created problem, just managing...
 
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10. Re: EA Earnings Oct 29, 2013, 22:10 NKD
 
HorrorScope wrote on Oct 29, 2013, 21:34:
NKD wrote on Oct 29, 2013, 19:59:
If you have more workers than you need, then yes, the problem is the workers.

Sounds like a management issue to me.

It's the nature of the beast. Software companies, especially games, have erratic staffing needs as projects come and go. There's little anyone in management can do about that.

Layoffs are a necessity, and the people who get laid off should be the ones you don't need. And generally companies aren't overstaffed with executive positions.
 
Avatar 43041
 
If you don't like where gaming is heading, stop giving your money to the people who are taking it in that direction.
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9. Re: EA Earnings Oct 29, 2013, 21:48 HorrorScope
 
Strong Results?

695 Million in sales for the quarter, slightly lower than last year.
Throw in expenses...
273 Million Dollar LOSS (Last Year 381 Loss)

Xbox Rev - 167 Mil
PS3 Rev - 131 Mil
PC Rev - 274 Mil (And we still don't get some sports games)
Wii rev $32 dollars, lol. jk

YOY the consoles down 15%.
PC up again at, what is that you say, oh my 28%!

Oh yes and the Holy Mobile market 75 Milion. FLAT YOY. LOL!!

I wouldn't say these are great #'s overall. Seems like they should be bowing to PC gamers demands.

This comment was edited on Oct 29, 2013, 21:54.
 
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8. Re: EA Earnings Oct 29, 2013, 21:34 HorrorScope
 
NKD wrote on Oct 29, 2013, 19:59:
If you have more workers than you need, then yes, the problem is the workers.

Sounds like a management issue to me.
 
Avatar 17232
 
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7. Re: EA Earnings Oct 29, 2013, 20:32 killer_roach
 
jdreyer wrote on Oct 29, 2013, 20:08:
Wow, a cool $bil. Regardless of how I feel about EA in general, that's impressive.

Yeah, that EPS number came out of nowhere - forward guidance has EA taking in a profit of about 45 cents a share for the next four quarters, so 33 cents in one is unusually strong. It's likely a one-off that is primarily due to some massive corporate blood-letting in recent months, but they seem to be moving in the direction of a more focused company, which can only help them in the long run.
 
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6. Re: EA Earnings Oct 29, 2013, 20:08 jdreyer
 
Wow, a cool $bil. Regardless of how I feel about EA in general, that's impressive.  
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5. Re: EA Earnings Oct 29, 2013, 19:59 NKD
 
Cutter wrote on Oct 29, 2013, 19:27:
When one executive makes more than the rest of the workforce combined the problem isn't the workers.

If you have more workers than you need, then yes, the problem is the workers.
 
Avatar 43041
 
If you don't like where gaming is heading, stop giving your money to the people who are taking it in that direction.
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4. Re: EA Earnings Oct 29, 2013, 19:27 Cutter
 
When one executive makes more than the rest of the workforce combined the problem isn't the workers.
 
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"The South will boogie again!" - Disco Stu
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3. Re: EA Earnings Oct 29, 2013, 18:51 NKD
 
ldonyo wrote on Oct 29, 2013, 18:34:
'...financial discipline...' is EA code-speak for 'laying off whole teams'.

Implying that big layoffs are never the right decision?
 
Avatar 43041
 
If you don't like where gaming is heading, stop giving your money to the people who are taking it in that direction.
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2. Re: EA Earnings Oct 29, 2013, 18:34 ldonyo
 
'...financial discipline...' is EA code-speak for 'laying off whole teams'.  
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1. Re: EA Earnings Oct 29, 2013, 17:42 Clever Caviar
 
Cool, great news EA, and well done!

Hopefully in the non-GAAP $65 million above guidance, you can find the budget resource to add controller support to your PC Mass Effect games. Also, while allocating resource to this, could you sanitise the DLC offerings? Maybe, GOTY, or "Director's Cut" branding would be enough for the re-issues to gain market traction?

 
::
Rockstar made $1 billion in 3 days with GTAV, yet they can't find the budget to port RDR to PC.
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