James Delahunty
5 Feb 2006 17:42
Electronic Arts, the world's largest video game maker, has reported a drop in profits as the company feels the pressure of next generation game development costs. The company reported a 31% drop in profits with net income in the three months to December falling to $259 million from $375 million over the same period in 2004. EA warned that 2006 will remain a challenging year for the firm. The video game industry is currently at the start of a transition to the next generation of gaming and console technology.
Microsoft was the first to launch it's next generation console, the Xbox 360, last November. Sony Corp. is expected to roll out the PlayStation 3 (PS3) console "sometime" this year, while Nintendo has indicated that the Revolution console will be released late in 2006. Electronic Arts, whose past gaming hits include The Sims, said total sales dropped by 11% to $1.27bn in the third quarter, from $1.43bn in the previous year.
The company said it will continue to invest in next generation games development but expects software sales across the industry to be flat over the coming year.
Source:
BBC News