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Electronic Arts reports its first fiscal quarter earnings today, and so it is probably a good thing that the video game giant (known for its Madden NFL, Battlefield, and Need for Speed franchises, among others) now has a chief financial officer.
EA appointed Blake Jorgensen as CFO, filling a gap that has been open since Eric Brown left the job to become CEO of conference call communications firm Polycom. Jorgensen will report to EA CEO John Riccitiello and start in early September. Jorgensen’s appointment will get a lot of attention because EA is under the financial microscope now.
Jorgensen (pictured right) was previously executive vice president and chief financial officer at Levi Strauss & Co. He was also the CFO at Yahoo and chief operating officer and co-director of investment banking at Thomas Weisel Partners, which he co-founded in 1998.
In other words, he has no experience in the video game industry. That may seem like a negative, but large companies frequently hire outsiders from beyond the games business.
Three top investment pros open up about what it takes to get your video game funded.
“We are very pleased to have an executive with Blake’s experience joining our senior team at EA,” said Riccitiello in a statement. “His deep understanding of finance and experience in online commerce and entertainment will be instrumental to EA’s transformation into digital distribution of game content and services. Beyond his experience and leadership profile, we think Blake is a great cultural fit for EA and the game industry.”
“New devices, digital distribution, and a rapidly expanding audience make this an incredibly exciting time to join the game industry,” said Jorgensen. “EA is a leader on every major game format from packaged goods to mobile, social, and free-to-play. I look forward to joining this team and helping them expand their global leadership.”
EA faces considerable financial challenges now as it tries to balance the sales of $60 retail games with the need to invest in digital games in the social, mobile, and online spheres. Last year, EA had $4.1 billion in revenues, and a quarter of those came from digital games. But the stock price is at historic lows, and investors have focused on declining subscribers for EA’s flagship online game, Star Wars: The Old Republic. The stock today is at $11.23 a share, valuing the company at $3.56 billion. For much of last year, EA was valued at around $7 billion.
Analysts are expecting EA to report non-GAAP revenues of $502 million and a loss per share of 42 cents. Arvind Bhatia, an analyst at Sterne Agee, believes EA will lower its full-year revenue guidance of $4.3 billion for the fiscal year ending March 31, 2013 and earnings per share guidance of $1.05 to $1.20.
Last week, shareholders asked Riccitiello when they would see returns. Riccitiello, speaking at the annual meeting, asked them to be patient and said that EA is moving toward all-digital revenues. Larry Probst, chairman of EA, said that the board is 100 percent behind Riccitiello.
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