Net revenue for the quarter was $640 million, down 18 percent as compared with $784 million for the prior year. Beginning in fiscal 2008, EA no longer charges for its service related to certain online-enabled packaged goods games. As a result, the Company recognizes revenue from the sale of these games over the estimated service period. This change resulted in a $296 million sequential net increase in deferred net revenue as of September 30, 2007, which will be recognized in future periods.
Sales were driven by Madden NFL 08, FIFA 08, NCAA Football 08, Tiger Woods PGA TOUR 08 and MySims, each selling over one million copies.
Gross profit for the quarter was $245 million, down 45 percent year-over-year. Net loss for the quarter was $195 million as compared with net income of $22 million for the prior year. Diluted loss per share was $0.62 as compared with earnings per share of $0.07 for the prior year.
Non-GAAP diluted earnings per share were $0.27 as compared with $0.21 for the prior year. (Please see Non-GAAP Financial Measures and reconciliation information included in this release.)
"Our strategic priorities on quality, innovation and managing cost are showing progress," said John Riccitiello, Chief Executive Officer. "Highly accessible new properties like SKATE and MySims have broken through with consumers and EA SPORTS continues to deliver great experiences on every platform. We've also announced a restructuring as part of a plan to better align cost with revenues."
"We think this will be a great holiday season for consumers," said Warren Jenson, Chief Financial and Administrative Officer. "We plan to launch over ten titles including The Simpsons Game, Need for Speed Pro Street, Hellgate: London, Rock Band, NBA Live 08, SimCity Societies and Crysis."
- Madden NFL 08 sold 4.5 million copies and was EAs best performing title in the quarter.
- FIFA 08 sold 2.9 million copies internationally - with sell through at retail up double digits year-over-year.
- MySims, a new owned intellectual property, sold over one million copies on the Nintendo DS and Wii.
- SKATE, a new owned intellectual property with a metacritic rating of 85, is the highest rated new game in the popular skate boarding genre.
- On the Wii from Nintendo, EA had 12 percent share in North America and an estimated 13 percent in Europe - making EA the number one third party publisher on this system year-to-date.
- Current generation (Xbox 360, PLAYSTATION3 and Wii) revenue (excluding deferral) was $399 million.
- EA announced the acquisition of BioWare Corp. and Pandemic Studios -- leaders in Role Playing, Action and Adventure games.
- Will Wright, creator of The Sims and SPORE, was the recipient of the British Academy of Film and Television Arts Fellowship - the first interactive entertainment professional to receive this award.