Shock of the Year: EA Makes Alot of Money

The current hardware generation has been very kind to more than a few developers.

Rockstar and Ubisoft both used this generation to break out and achieve immense critial and commercial success, for example. No company can claim the same kind of financial success as EA has experienced in the last few year however, with over 20 platinum selling games last year alone.

EA recently released their 2nd quarter earnings, the results of which surprised few. Suffice to say, the company isnt going to be filing for chapter 11 any time soon.

After an incredibly successful fiscal year in 2003, profits have only continued to rise for EA, as this quarter showed a 35% increase net revenue over last year’s numbers taking them to $716 million, and net income coming in at $97 million. Those numbers, while utterly fantastic, still werent enough to please investors, and the company’s stock fell as a result.

Several strong releases helped bring EA to this point, the most notable of which were the latest iteration in the best-selling Madden franchise, and the sequel to the most popular PC game of all time, The Sims 2. Those titles, in addition to NCAA Football and the critically acclaimed Burnout 3: Takedown sold more than 1 million units in just a few short months (comparitively, Halo has sold just over 5 million copies in 4 years). It remains to be seen just how long these titles will keep raking in the dough, but precedent indicates that The Sims and Madden will continue to sell well for the remainder or the year [at least].

EA expects 3rd quarter net revenue to be between $1.4 and $1.475 billion, comparable to last year’s $1.475 billion, and full fiscal year (ending March 31st, 2005) net revenue to be between $3.275 and $3.4 billion, an increase over the last fiscal year’s $2.957 billion. EA also announced a $750 million share repurchase program that will be carried out over the next 12 months.