Videogame publishers Electronic Arts Inc.(NASDAQ:EA) and Take-Two Interactive Software, Inc.(NASDAQ:TTWO) reported their weakest quarter of the year with losses and declines in revenues on Tuesday.
EA's online multi-player game "Star Wars: The Old Republic' failed to get adequate subscriptions with players exiting, put off by the monthly subscription format. The company plans to offer a free-to-play version as well in addition to its premium subscription-based offering.
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For the quarter to June the company earned $201 million or 63 cents a share compared to a profit of $221 million or 66 cents a share, in the year-ago period.
Adjusted revenues for the quarter were $491 million down from $524 million a year earlier.
Excluding one-time items the company lost 41 cents a share, while analysts had estimated a loss of 42 cents.
The company has forecast earnings in the range of 7 cents and 12 cents for the September quarter with revenue ranging from $1.05 billion to $1.10 billion. This compares to analysts’ estimates of 14 cents earnings on revenues of $1.08 billion.
Shares of EA are up 0.50% in the pre-open session.
Its peer Take-Two Interactive Software, Inc.(NASDAQ:TTWO) also had a similar story to relate with two of its games, "Spec Ops: The Line" and "Max Payne 3" failing to gain traction.
The response from players did not match the promotions and marketing hype.
The company has hopes from new releases such as “NBA 2K13,” “BioShock Infinite” and “Borderlands 2” that could boost its performance in the second quarter. Take-Two is still to set a release date for the next version of its `Grand Theft Auto' franchise.
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In the June quarter Take-Two reported a loss of $110.8 million, or $1.30 a share, on revenue of $226.1 million, compared with a loss of $8.7 million, or 11 cents a share, on $334.4 million in sales, in the same period a year ago.
For the second quarter to September the company forecast a loss, excluding one-time items, of between 15 cents and 30 cents a share, with revenue in a range of $200 million to $250 million.
Share of TTWO slid 4.33% in the pre-market session after falling about 4% in the previous trading session.