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Next-gen demand can't replace current-gen shortfall for EA

Results for the next-gen console launches for Sony and Microsoft are out, and while EA dominated the competition, it didn't make up for softness in 360 and PS3 demand.
Today EA announced its third quarter 2013 financial results, which ended December 31 and thus includes the launches of the PlayStation 4 and Xbox One. So how'd that go? The good news for EA is that it carved out a huge percentage of the software market share for those devices. EA says it was the number one next-gen publisher in the Western market, capturing 35 percent of software sales for PlayStation 4 and Xbox One. The bad news, however, is that sales of next-gen titles can't make up for the drop-off in demand for current-gen titles. Year-on-year, the company's Q3 revenues for Xbox 360 and PlayStation 3 games dropped from $566 million to $425 million -- 25 percent -- yet next-gen games generated only $24 million for the company. Revenue for PC games was slightly up (13 percent) and overall console game revenues were down 22 percent overall, year-on-year. This jibes with data out of GameStop, which said that sales of new software took a hit during the same period, as sales of next-gen titles were unable to offset the downward trend in current-gen game sales. Mobile revenues went up 13 percent, however; The Simpsons Tapped Out has generated over $130 million in revenue since its launch, the company revealed. That didn't make for a big change in its handheld/mobile numbers, which were largely flat when decreases in handheld console games are taken into account. The silver lining: Overall digital revenues were up 27 percent year-over-year, to $517 million. For the quarter, the company saw a net loss of $308 million. This bad news is offset, it says, by increased operating efficiencies leading to better profit potential, and its digital and next-gen initiatives. All the same, the company is lowering its full-year revenue guidance to $3.91 billion thanks to that weakness in demand for current-generation software. Shares in EA took a slight tumble in aftermarket trading but quickly rebounded to $24.25 -- still a 2.49 percent drop -- at time of posting.

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