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EA's operating margin damaged by PS3 sales

Posted August 2nd, 2007 at 12:09 EDT by Mike Harradence
14 Comments

Electronic Arts CEO John Riccitiello has conceded that sales of PlayStation 3 have fallen slightly below the company's expectations, which he in turn felt contributed to a recent fall in the publishers operating margins that dropped from 20 per cent to 5 per cent since the previous console cycle.

Speaking during a quarterly conference call, Riccitiello observed how the next-generation market is currently taking longer to gain momentum compared to the previous console cycle, which was ultimately won by Sony's PlayStation 2 console.

"Point blank, this cycle is developing quite differently than the last cycle. The next-gen hardware build is going a little more slowly”, he said, noting how EA supported PS2 in a "gigantic way”.

The PS3’s performance to date has been somewhat more reserved than anticipated however, with Riccitiello stating, "This time, there's been some unexpected strength with the Wii and the PS3 hasn't--yet--performed as well as we expected it to. That probably has a bigger impact than any other factor on our margins."

However, he is confident that the release of titles such as the highly anticipated Grand Theft Auto 4 will be a "double positive" for the both the company and games industry, in addition to stimulating lagging hardware sales.

"Great software sells hardware," concluded Riccitiello.

Source: Next-Gen.biz

Comments

rossinator_99
- 7:30am EDT - August 2nd, 2007
- 1
so does this mean that as ps3 owners we won't be getting all those great EA sequels? becaue i know they put alot of time into those and everything.
McFart
- 7:30am EDT - August 2nd, 2007
- 2
Message to EA: Don't sell CRAP and you'll make money for sure...Insomniac with it's Resistance doesn't have such problems..Guess why....
Sniperwithacause | Sniperwithacause
- 7:35am EDT - August 2nd, 2007
- 3
Their all so money hungry it unreal!
anonymousaversa
- 7:40am EDT - August 2nd, 2007
- 4
McFart, my thoguhts exactly. Stop putting out complete CRAP in the form of Xbox360 ports, and you'll see results. He even says himself. "Great software sells hardware." Well...make good software. I wonder if these executives have any clue what's going on in gaming. Honestly, wake up EA.

And Jack Tretton going from Microsoft to EA will definately not help this situation. How sad.
duomtl
- 8:26am EDT - August 2nd, 2007
- 5
yeah your sales arn't lagging because of ps3 sales, your sales are lagging because no one wants to play the 8th need for speed, or the 6th medal of honor, and i can go on, but i don't feel like it
Vicious
- 8:33am EDT - August 2nd, 2007
- 6
F**k EA, all the games they brought out so far were either stale ports or inferior conversions, and they expect a good yield. They must be Nucking Futs to think that.
gingo
- 8:42am EDT - August 2nd, 2007
- 7
psn id: gingo ... nobody should criticise the ps3 sales until the good games come out then we will see how many ps3s get sold
anonymousaversa
- 9:26am EDT - August 2nd, 2007
- 8
woops! I meant MOORE from microsoft, not Trenton from Sony...typo, my fault
Muzikguy
- 9:29am EDT - August 2nd, 2007
- 9
EA are a bunch of babies. Like you can't afford to lose a little money? Businesses aren 't always going to get double digit growth.
mikeghtmare
- 9:48am EDT - August 2nd, 2007
- 10
Weren't most, if not all, EA games multiplatform last gen? If they "supported" sony was because the xbox came later, but as soon as it came out they went multiplatform. They should start making good games if they expect to sell.
KJD007
- 10:16am EDT - August 2nd, 2007
- 11
It seems to me something very fishy is going on over there at EA. Moore's departure from Microsoft to the EA camp may be just the center of it all. Just a thought. PS3, it's in the box!
D3v1lwqer23
- 10:44am EDT - August 2nd, 2007
- 12
Well EA, STOP PUTTING OUT CRAP GAMES!!!
dandad1
- 10:58am EDT - August 2nd, 2007
- 13
What do they exspect when they havent put out that many games and 90% of them sucked. Dumb A**.
InfernoReaper
- 2:46pm EDT - August 3rd, 2007
- 14
"Great software sells hardware" No 5#!7?! If you can't spend the time to make worthwhile ports, then just shut your mouth and find someone else to blow.