Electronic Arts Acquires Social Gaming Company Playfish For $400m

Electronic Arts Inc.'s (ERTS) fiscal second-quarter loss widened as the market for videogames remained weak, prompting a weak fiscal-year outlook and another round of cost cutting.

The company said it will cut 1,500 jobs, or 17% of its workforce, mostly by March 31, in a restructuring aimed at trimming at least $100 million in costs. Most of the cuts, about 900, will come from development, with 500 from publishing and label support and 100 from corporate. The plan will result in charges of $130 million to $150 million. The company currently has about 9,000 employees.

EA also has cut out "the bottom third" of its games in development in order to focus on titles with a much better chance of being blockbusters, executives said.

"Retailers remain cautious and report that foot traffic remains slow," EA Chief Executive John Riccitiello said on a conference call to discuss the results and guidance. "Various digital sectors are performing well, but the packaged sector is under pressure."

He added he remains "cautious" about the rest of the year and that October was another down month for the videogame business.