Electronic Arts to close Surrey lab

Electronic Arts to close Surrey lab

Games giant reports $195m loss in second quarter

The Electronic Arts (EA) board of directors has approved a major reorganisation in which it will close some of its facilities, including its Surrey lab in Chertsey.

The company said in a statement that it will be "relocating and/or eliminating certain job positions, incurring costs in connection with lease and other contract terminations, and incurring IT and consulting costs to assist in the reorganisation of business support functions".

EA hopes that the steps will save the company between $25m and $30m before tax.

The video game publisher suffered a net loss of $195m in the second quarter, compared to a net profit of $22m the previous year.

Net revenue was down 18 per cent year on year at $640m, and gross profits were down 45 per cent at $245m.

"Our strategic priorities on quality, innovation and managing costs are showing progress," said EA chief executive John Riccitiello.

"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 have also announced a restructuring as part of a plan to better align costs with revenues."

EA is to release over 10 new games in November and December, including Crysis, Hellgate: London, The Simpsons Game, Need for Speed Pro Street, Rock Band and SimCity Societies.

The company recently announced an agreement with Elevation Partners to acquire game developers BioWare and Pandemic Studios for over $620m.

EA said that it is expecting net revenue for the third quarter of between $1.325bn and $1.575bn.

Riccitiello explained in a conference call that EA will test new pricing models in Asia over the coming months, and said that some non-core titles in the western market may also undergo new pricing structures.