Originally posted by Raiz1

Originally posted by Kyleran

Originally posted by Raiz1

Nope.

In a bad economy, its services that gets cut first and then you trim the fat from the remaining budget. That 10% cut includes contracts that aren't being renewed (generally) and a some customer service.

It looks like EA is positioning themselves to grow. Think of it as pruning a tree. Old branches need to be cut in order for upward growth to continue.

In a bad economy, its under performing projects that get cut first.  Question is, does this include WAR?

 

 

Nah, you are right with under-performance, but WAR doesn't fit that category imo.

You ALWAYS have job cuts after a merger unless you get bought by FedEx (cause those guys don't lay anyone off). Not renewing contracts plays a lot into future projects, maybe console games. Madden '10 might not be that great. This is the perfect time for it and you see less "stuff" in the budget. I'll give you a few examples:

No merit raises; no bonuses; reduction in 401k contributions; different benefits program and insurance provider; no more coffee in the emplyoee break-room; no more catered lunches for the office; cheaper office supplies; reduced hours of operation.

The above are all things you see just before, during, and after the axe falls. It has less to do with WAR and more to do with EA as an entity. I think call-in customer service and response times will take a direct hit. Only time will tell how deep the rabbit hole goes, but 1000 jobs can easily be cut without 1 title noticing a big difference.

Actually, the opposite is true.  It is much better to fire 10% of your workers and have them be unhappy, then it is to reduce pay and benefits of 100% of your current workers and have them be unhappy.

Or as it is written in my textbook.   " Never cut benefits when you can cut jobs"

so it look like an additional 4% got the axe company wide,

Additional 4% to get the ax company wide

More bad news from the additional restructuring plans at EA comes in the form of an additional four percent of employees to be on the chopping block over the next three-month period, as the company continues to refocus its efforts and narrow its product offerings.

The additional headcount reductions will be spread out over the company globally and will not be focused on any specific studio or business unit. The cuts will take place over the next three months and are targeted to be completed before the company begins its next fiscal year on April 1st 2009.

According to our source, Black Box studio, which is based in Vancouver and responsible for the Need for Speed franchise as well as the Skate franchise, will move to the EA studio in Burnaby, British Columbia as part of the latest restructuring moves. Plans to add a third studio in Vancouver have been abandoned for the time being, but that’s not to say that they might not be revisited at some point in the future.

While some had suggested that EA-owned Pandemic and EA Los Angeles would see significant reductions as part of the latest moves, our sources are now telling us that while these studios would see reductions, they would not be any more or any less than other EA studios or facilities.

EA is also looking at the portfolio of gaming offers and while they continue to be committed to taking risks and producing high-quality games, some underperforming titles can be expected to be dropped during this restructuring process. Currently, no specific titles have been mentioned, but it is expected that each and every title will have to justify its profitability in order to continue development.

In addition to the restructuring, EA has also announced that it has joined the Steam digital distribution platform owned by Valve. EA is launching on Steam with Mass Effect, EA Sports FIFA Manager 2009, Need for Speed Undercover, and Spore Creepy & Cute Parts Pack. In addition, the company will also be adding Spore, Warhammer Online: Age of Reckoning, Command & Conquer: Read Alert 3, Mirror’s Edge, and Dead Space, with the majority of these becoming available on Steam in January 2009.

The announcement that EA will become committed to the Steam digital distribution platform is a radical shift for the company. EA has been a holdout on offering games using Steam for the PC; it has instead been attempting to build up its own digital distribution service. As least for the time being, EA will continue to have PC offerings that will be available using its service as well as Steam’s."
 

Another headline reads: EA not connecting with gamers

Star Wars MMO might be best hope in the pipeline

What is the real problem with EA these days? Many analysts seems to think that while the company has some solid titles that have had moderate success by today’s standards, the majority of the recent releases have lacked the ability to connect with hard core console gamers.

EA has continued to have success with titles in the EA Sports brand, as well as the Sims releases, but other recent titles such as the latest Need for Speed and Mirror’s Edge have been flat, even through the titles received good reviews from the media.

As for the future, we have been reporting over the last several weeks that the company will restructure and refocus in an attempt to figure out what gamers want and deliver compelling content to get sales moving again.

While the company has some titles already in the pipeline for 2009, the best hope for the company to recapture market share might come in the form of Star Wars: The Old Republic MMO that is being developed by Bioware.

It would also appear that EA has not invested enough money in the development of bringing new hit franchise to the console market space. Instead, the company relied on trying to rehash the same old franchises in new ways to drive sales and this strategy had led to a decline in some of the best franchises in the EA stable.

While it will be hard for EA to establish a new franchise on the current generation of console system, it is obvious that gamers are looking for something that is much better than the titles that EA has been shoveling out as of late. The innovative titles that have been released by the company have gone unnoticed and it is going to take a lot of hard work and some luck for the company to get back in the game. It might, in fact, not happen in this round of console systems at all, but instead have to wait till the next generation of console system before the company can get some of its mojo back. "

Doesn't look good to me, I have a feeling WAR is not profitable enough for them.

Apparently EA plans to play it safe, investing in popular franchises and proven concepts, rather than truly new, innovative, but also risky title.

there's no way they will ger rid of Madden, even though they really need to design a new engine for that game and NCAA 09 and get rid of the glitches....if they cut any of those console sports games it will probably be like Nascar and Hockey.

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Star Wars MMO might be best hope in the pipeline

What is the real problem with EA these days? Many analysts seems to think that while the company has some solid titles that have had moderate success by today’s standards, the majority of the recent releases have lacked the ability to connect with hard core console gamers.

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While the company has some titles already in the pipeline for 2009, the best hope for the company to recapture market share might come in the form of Star Wars: The Old Republic MMO that is being developed by Bioware.

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My thinkings exactly as earlier. They won't be underfunding Bioware. They don't want to have any problems with an established IP such as LucasArts and Star Wars. Bioware is as safe as a Wall Street bank trying to secure government bailout funds.

Originally posted by Azrile 

Actually, the opposite is true.  It is much better to fire 10% of your workers and have them be unhappy, then it is to reduce pay and benefits of 100% of your current workers and have them be unhappy.

Or as it is written in my textbook.   " Never cut benefits when you can cut jobs"

As long as you do it in one axe chop.  If you spread out layoffs, or layer them, such that people are hanging on for 3, 4, 6 months not knowing whether the axe chopping is done with .. that creates huge morale problems which eat into productivity substantially. 

I've seen companies mix and match too -- get rid of merit increases and the like, move everyone to a 90% schedule (ie, give everyone a 10% paycut) and lay off some people, but less than would have otherwise been the case.  The people who are *not* laid off in that scenario -- if this is sold to the employees as a package deal -- will be more accepting of it because it helps them avoid being laid off.

I'm going to post this for a couple reasons:

1.) It's just damn cool that a 'smaller" dev company beat EA.

2.) It shows just how low on the income scale EA has become when they can't outspend Take-Two.

3.) It points out, to me at least, that  the takeover attempt was a desperate grasp at straws to have a hit ( as well as trying to monopolize sports games by shutting down 2k, which would also mean EA wouldn't have had to pay fees for exclusive NFL rights anymore and would have had major league baseball games tied up also ).

http://www.gamespot.com/news/6202607.html?tag=latestheadlines;title;5

Take-Two reveals EA bid cost, earnings breakdown

By Tor Thorsen, GameSpot   Posted Dec 19, 2008 2:51 pm PT

SEC filing reveals publisher spent $11.1 million blocking takeover; 82% of earnings from current-gen consoles, with PS3 the top earner; ZelnickMedia paid $2.5 million management fee.

On Wednesday, Take-Two Interactive reported a record $1.5 billion in annual revenues and $97 million in annual profit, but saw its stock slide due to lower-than-expected quarterly earnings. Today, the New York-based publisher revealed the details of its 2008 fiscal year, which ended October 31, via a filing with the Securities and Exchange Commission (SEC).

Buried among the facts and figures were a series of interesting bits of information about the company. First, Take-Two spent a not-so-small fortune staving off the advances of Electronic Arts, which gave up its seven-month-long takeover bid in September. "We incurred $11.1 million of costs in 2008 related to the EA Offer and our strategic review process," the publisher reported.

Spearheading the defense against EA's bid was Take-Two chairman and Men's Fitness cover athlete Strauss Zelnick (pictured), who presided over the company's roller-coaster ride on the NASDAQ stock market. When EA first offered $26 for each of its rival's shares, the Grand Theft Auto IV-maker's stock price went from $17 to a 52-week high of $27.95 on June 2. Once EA walked away, though, the bottom dropped out of Take-Two's share price, which was below $8.50 as of press time.

Although some executives would be fired over such a dramatic devaluation, Zelnick is instead being handsomely rewarded. Though his official annual salary is just $1, his company, ZelnickMedia, was paid $2.5 million in "management fees" by Take-Two during its last fiscal year. It also received a restricted stock grant of 600,000 shares that will vest over the next three years. Additionally, if Take-Two meets certain performance requirements, ZelnickMedia stands to receive an extra $2.5 million, and a 900,000-share, four-year vested stock grant.

Speaking of earnings, Take-Two's SEC filing also dissected its sources of revenue. Some 82.3 percent of its net publishing revenues comes from current-generation platforms. Of that, the company took in $347.0 million from PlayStation 3 games, $281.5 million from the Xbox 360, and $112.0 million in Wii sales. The former two figures were driven by GTAIV, whereas the latter owes its success to Top Spin 3, Major League Baseball 2K8, and the Carnival Games casual series. Interestingly, Take-Two considers the DS a previous-generation system along with the PlayStation 2.

Territory-wise, 43.5 percent of Take-Two's annual take came from outside North America, up from 34.7 percent the year prior. The company made $33.2 million from its deal with Capcom to localize and sell Grand Theft Auto games in Japan. Annual earnings rose by $20.4 million thanks to the strength of foreign currencies, with Take-Two crediting the surging Canadian dollar as a major factor.