Holiday profit slumps at EA
The video game industry’s transition to new game consoles is still weighing on publishing giant Electronic Arts, but the company’s bets on new technology are starting to pay off. Those opposing trends were evident Thursday when the Redwood City company released its holiday earnings. On the one hand, the company reported that its profit for the period slumped, thanks to rising overhead and development costs. On top of that, EA offered a worse-than-expected forecast for its current quarter.
On the other hand, the company’s results for the holiday period were much better than anticipated. And the company is seeing strong growth in sales of games for new platforms such as Microsoft’s Xbox 360, almost to the point where those sales are making up for declining demand for games for older systems such as Sony’s PlayStation 2. In an interview with the Mercury News, company Chief Financial Officer Warren Jenson noted that EA’s earnings topped the outlook the company gave in November. The profit decline was largely the result of investments the company is making that should pay off in the future, Jenson said.
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