Current-Generation Sales Prove Taxing for Electronic Arts (EA)

NEW YORK (TheStreet) -- While it wasn't a game-changing quarter for Electronic Arts (EA), it wasn't game over either. The biggest concern, Sony's (SNE) PlayStation 4 and Microsoft's (MSFT) Xbox One, last year hampered the sale of older-generation video games.

"In the third quarter of fiscal year '14, we had the unprecedented excitement of two new game consoles launching within weeks of each other. With that came the challenge of launching a full slate of EA's top titles for both next-gen and the current-gen consoles," said CEO Andrew Wilson in a post-earnings conference call.

"Our Q3 revenue shortfall was driven by a much sharper decline than anticipated for demand," added CFO Blake J. Jorgensen.

NPD results for U.S. sales for PS3 and Xbox 360, the older-generation consoles, declined 35% compared to the same period a year earlier.

Weakness in demand for current-gen software was at least partially offset by higher demand for next-gen games. Since the new consoles launched in October, Electronic Arts released six compatible titles: FIFA 14, Battlefield 4, Madden NFL 25, Need for Speed Rivals, NBA LIVE 14, and Peggle 2. Over December, The Sims creator managed to carve out an early leadership position among next-generation gamers, achieving 40% segment share on the PlayStation 4 and 30% segment share on the Xbox One in the U.S.

"Our estimates indicate we garnered similar shares in Europe. On average, every gamer in Europe that bought a next-gen console is playing one of EA's next-gen games," said Wilson.

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