EA Q2 2009 financial report announces 1,500 lay-offs

Electronic Arts (EA) numbers for the second quarter of 2009 are in, and though most numbers are up, the company will be closing several studios and laying off 1,500 of its employees, 1,300 as part of a planned "restructuring" to be largely completed by March 31. The figures are up over the 600 cuts made during last year's second quarter.

GAAP, if you're not familiar with the term, refers to "Generally Accepted Accounting Principles." Simply put, it's the rules by which financial reports are written by, though for a multitude of legal reasons, non-GAAP and GAAP revenues are necessary to be filed and reported.

With that in mind, GAAP net revenue dropped $106 million from last year's quarter to $788 with $391m (versus $310) accounting for GAAP net loss. Non-GAAP net revenue was an all-time high of $1.147bn, up slightly over last year's $1.126; non-GAAP net income totaled $19m versus a $20m net loss the year prior.

Back to the lay-offs: EA states these are part of its plan to "narrow its product portfolio to provide greater focus on titles with higher margin opportunities." This could mean really bad news for fans of titles like Mirror's Edge, regarded as "high risk." EA has previously stated they would see the development of that series and others, and focus on quality and innovation in general, despite initially low numbers. Whether or not that has changed remains to be seen -- we've contacted EA for comment.

Yearly savings from the cuts are expected to clear $100m in addition to $130-150 restructuring charges.

Also announced is the acquisition of social media games company Playfish for $275m.

Following are the highlights of the quarter as compared to last year's:

• EA was the #1 publisher in North America and Europe fiscal year to date, with 21% segment share - up four points. EA had four of the top-ten games in both North America and Europe.
• Eight EA titles launched this quarter with a Metacritic rating of 80 or above, including: NHL(R) 10, The Beatles: Rock Band, FIFA 10, Battlefield 1943(TM), Madden NFL 10, NCAA Football 10, Dead Space(TM) Extraction, and Need for Speed SHIFT. Calendar year-to-date, EA has 17 titles rated at 80 or above.
• FIFA 10, with a Metacritic rating of 91 on the Xbox 360(R) and PlayStation(R)3, was EA's strongest European title launch in its history - selling 4.5 million copies in week one.
• Madden NFL 10 was the #1 title in North America for the quarter, according to NPD.
• Need for Speed SHIFT, with a 22 point increase in quality as measured by Metacritic, sold over 2.5 million copies in the quarter.
• Digital non-GAAP net revenue was an all time quarter high at $138 million - up 23 percent year-over-year.
• EA recently signed five new advertising partners - Johnson & Johnson, Doritos, Apple, Pfizer and Renault -- for $7 million in incremental advertising bookings.
• EA Mobile, the world's leading publisher of games for phones, delivered $50 million of non-GAAP net revenue in the quarter - up nine percent year-over-year. EA is the #1 publisher of games on the iPhone with seven of the top 10 games; and #1 on Verizon with eight of the top 10 games.