Electronic Arts reveals 9pc earnings drop, free-to-play version of Star Wars: The Old Republic

1 Aug 2012

Video-game developer Electronic Arts’ earnings sank 9pc in its fiscal first quarter, from US$221m in the same period last year to US$201m. The company has also announced a US$500m share repurchase and a free-to-play version of its Star Wars: The Old Republic online game.

Revenue for the maker of popular titles, such as The Sims, slipped 4pc during the April-June period to US$955m.  

Electronic Arts’ adjusted loss came to 41 cents per share, excluding acquisition expenses, stock compensation costs, and accounting for deferred revenue from games with online components.

Adjusted revenue, which accounts for deferred revenue and costs related to games with online components, dropped 6pc to US$491m.

“We have established an unmatched diversity in our business with multiple brands performing across several channels, business models and geographies,” said CEO John Riccitiello. “This allows us to drive profitable growth in a rapidly transforming marketplace for games.”  

President of EA Labels Frank Gibeau said Electronic Arts is progressing in its goal of becoming the leading digital entertainment company.

“Over the last 12 months, we generated more than US$1.3bn in non-GAAP digital net revenue, and approximately two-thirds of our non-GAAP net revenue in the first fiscal quarter was in digital,” Gibeau said.

Electronic Arts said yesterday that Star Wars: The Old Republic will move to a more accessible two-tiered pricing model in November. Players can chose between a US$14.99 premium monthly subscription and a free-to-play model with some restrictions on content and advanced features. Players will be able to purchase upgrades with in-game currency.

Gaming buttons image via Shutterstock

Tina Costanza was a journalist and sub-editor at Silicon Republic