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Amidst Layoffs EA Purchases Playfish

Posted on: Tuesday, 10 November 2009, 14:14 CST

Videogame publisher Electronic Arts (EA) on Monday reported its 11th net loss in a row for the last quarter.

The company reported a net loss of $391 million, or $1.21 per share in its second quarter. Last year, the firm reported a new loss of $310 million, or 97 cents per share.

The company also announced it would be initiating cost-cutting efforts that will include a 16 percent workforce reduction of 1,500 jobs.

EA reported that revenue rose two percent to a record $1.147 billion thanks to new game arrivals, including "FIFA 10," "Madden NFL 10," and "The Beatles: Rock Band."

Also on Monday, EA announced it would purchase of London-based social network game developer Playfish.

The deal with Playfish is estimated to be worth up to $400 million. EA acquired the company for $275 million cash and $25 million in equity retention arrangements for employees, AFP reported.

EA also said it would pay up to $100 million if the company reaches certain achievements by December 31, 2011.

"Social gaming, with its emphasis on friends and community, is seeing tremendous growth and this is the right time to invest to strengthen our participation in this space," said Barry Cottle, senior vice president and general manager of EA Interactive.

"With the addition of proven expertise from Playfish, their broad consumer base and strong game brands, we're moving ahead aggressively in our plans to lead in the category of cross-platform social entertainment."

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On the Net:

• Electronic Arts
• Playfish

Source: RedOrbit Staff & Wire Reports

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