Electronic Arts Posts Decline in Profit

The company also announced a $500 million share buyback.

An Electronic Arts rival, Take-Two, reported a net loss on Tuesday.

Electronic Arts, which has been trying to expand its mobile and online games business, also said Tuesday that its net digital revenue jumped 55 percent.

For the three months ended June 30, the company posted overall revenue of $491 million, compared with $524 million a year ago. Net income dropped to $201 million, or 63 cents a share, compared with $221 million, or 66 cents a share a year ago.

Excluding one-time items, the company recorded a loss of 41 cents a share, beating by a penny an average forecast for a 42-cent loss, according to Thomson Reuters.

For fiscal 2013, Electronic Arts, which battles Activision Blizzard and other publishers for a slice of a decelerating video games market, reaffirmed its outlook for diluted earnings of $1.05 to $1.20 a share.

Publishers are struggling to sustain revenue growth as gamers migrate steadily to casual and social games online or on mobile devices. On Tuesday, Electronic Arts said it would offer a free-to-play option for its Star Wars: The Old Republic game, hoping to stop gamer losses.

“We saw a lot of good traction there so we decided in the fall we would provide an opportunity for consumers to play the game free-to-play with some restrictions with an experience through micro-based transactions,” said Ken Barker, the chief financial officer.

The company has struggled to get the multiplayer role-playing game based on George Lucas’s science-fiction movie off the ground since its introduction last December.

Company executives told analysts in the earnings conference call that Star Wars: The Old Republic, had less than one million active subscribers, down from 1.3 million a quarter ago.

Take-Two Interactive Software posted a net loss and 32 percent drop in revenue in its fiscal first quarter, because of weak sales of Max Payne 3 and Spec Ops: The Line.

Take-Two, which publishes the hit Grand Theft Auto franchise, said net revenue came to $226.1 million in the quarter ended June 30, compared with $334.4 million a year earlier. That was below the $254.2 million average estimate of analysts, according to Thomson Reuters.

The company reported a net loss of $110.8 million, or $1.30 a share, versus a loss of $8.6 million, or 11 cents a share, a year earlier.