EA Feels The 310 Million Dollar Dagger

Halloween is a scary time of year, no less when you’re posting a $310 million net loss. EA CEO John Riccitiello sees “weakness” at retail in October and we’re betting this isn’t the end of the road of sorrow for game publishers around the globe.

Electronic Arts isn’t unfamiliar with bad times and we’re sure to see them make constant adjustments to their headcount, game releases and press as the economy goes into a bit of a slump. Although the game industry won’t see as big a hit as the financial market, everyone is going to watch their spending during slower economic times.

That slowness is a red flag for the mega-publisher, which says it’s “proactively making cost adjustments now.” One of those adjustments is the axing of some 600 EA employees across the globe. (Kotaku)

Last year Electronic Arts lost a “small” $195 million during the same time, not exactly a gold star on the financial records but it sure looks better than this loss. A few games may crumble under the economic pressures, Tiberium for example, but let us not forget the good times! EA posted some nice figures for Spore, Madden NFL 09, Warhammer: Age of Reckoning and Mercenaries 2: World in Flames.

So, they mixed a few sequels with a few new franchise hits and gave gamers some pretty hot titles for the year. Of course, hot titles in our hand do not always translate to positive revenue in theirs.

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XBLA offers great opportunities for the indy developer but everything comes at a price. Over the last three years Braid‘s developer Jonathan Blow spent a reported $180,000 to create the popular Braid title on Xbox Live. He’s going to need a lot more sales before he can celebrate the highly valued, highly reviewed title.

The Independent Games Festival was kind to him, giving him the “Innovation in Game Design” back in 2006, since then he’s put his money where is mouth is; his own money. There are good times and bad times when you’re discovering your dreams. The reviews surely made him feel great about the work he has done over the last three years but a review won’t pay the bills.

It may be a hard road ahead for Jonathan, hopefully at least breaking even on the project. Although he may not look back at the game as a financial success we can only imagine he’ll have a lot easier time getting funding or publishing for his next title, if that’s the path he chooses.

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It’s clear publishers like Electronic Arts hate to take risks on video games. They’re not alone in their opinion, look how many sequels we’ve got for the holidays compared to new creative titles like Little Big Planet, or how publishers push out sequels to hot titles until we can’t take it anymore; how many Guitar Hero titles will arrive before we scream “enough!”?

Speaking to rocking music, Electronic Arts may pass on the chance to pickup Brütal Legend, a title originally being published by Vivendi Games prior to the Activision Blizzard merger. The title was left without a home when the merger was complete along with other dropped titles.

Why would EA not take the chance with the game? Risk factor. Brütal Legend is a game title developed by Double Fine Productions and has been designed by Tim Schafer, with past games like Monkey Island, NES’s Maniac Mansion and the fantastic title Full Throttle. With such sweet titles under his belt, why wouldn’t a game designed by Tim Schafer be a hot commodity in the market?

The game brings music and action adventure together in a creative twist. No, it’s not Rock Band and it’s not Guitar Hero, thus, MTV and Activision don’t care about it. However, the game plot and storyline are music related and, supposedly, the main character is voiced by Jack Black, vocalist of Tenacious D and popular actor (School of Rock anyone!?)

Creator Tim Schafer has said that roadies have long fascinated him. Schafer originally thought of the game’s title over fifteen years ago. “I was riding a bus, thinking about a game that would be the complete opposite of what we were working on, The Secret of Monkey Island. And Brütal Legend leapt into my head. (wikipedia)

It appears a series of publishers have walked away from Brütal Legend without much hesitation. “I have seen it,” EA CEO John Riccitiello told Gamasutra. “I am well aware of what the game is. It’s a very significant creative risk.” (joystiq)

Where would the game be without significant creative risks? In many ways, World of Warcraft was a risk… it’s only got 9 million or more players.