EA Kills Off Online Division
- March 04, 2003 11:23 AM PST
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The industry giant decides to consolidate EA.com into its core operations after The Sims Online fails to get the division out of a money pit.
Electronic Arts announced today that it will dissolve EA.com, its online-games division, and consolidate its operations into the core outfit, in what amounts to a retreat from their large-scale plans for the PC online games marketplace. According to a statement filed today, the company will take a one-time charge of $55 million to $75 million to cover the costs associated with the consolidation. That comes five months after EA spent $14 million to lay off 240 EA.com workers and restructure the struggling division.EA.com lost $3.5 million in the three-month period ending December 2002, an improvement over the $6.7 million they lost during the same quarter in 2001. The division was planning to turn a profit in the current quarter, ending March 31, but gave up this goal after The Sims Online launched late and didn't sell up to the parent company's expectations. An estimated 85,000 paying customers were playing The Sims Online as of last month, a far cry from the 200,000 EA was expecting to storm the servers by April.
The heavily-vaunted online division of Electronic Arts began business in 1997 with Ultima Online, a groundbreaking MMORPG and still its most popular title, with approximately 230,000 subscribers. However, many of its other projects?including ambitious psychological thriller Majestic and multiplayer racer Motor City Online?were sales flops, and space exploration game Earth & Beyond has sold only 53,000 copies since its launch last September.
