The South African division of international gaming company Electronic Arts (EA) is to close as staff retrenchments hit branches worldwide.
Reports of the South African office closure were published today by gaming including LazyGamer and MyGaming.
EA employees will be “‘looked after’ quite nicely in the form of compensation,” LazyGamer reported.
However, the company’s executives declined to comment on further confirmations.
EA’s evacuation from the South African gaming scene is counted as a sore loss because of its reliable local supply of reasonably priced games enabled through local production.
Meanwhile the gaming group’s share value has increased by US$1.47 on Nasdaq at US$19.88 by yesterday (Tuesday) after hours, following a closing value of US$18.41.
Remaining tight lipped about the cutting of employees, Larry Probst, executive chairman at EA, told analysts: “We’ve cut operating costs, sharpened our product focus, and made strategic investments in next-generation consoles, mobile, and PCs,” Reuters reported.
EA is among the struggling gaming industry which now has to compete with mobile device versions such as Angry Birds which is overtaking generally thriving game sales.
Software and hardware buyers are also delaying game purchases in anticipation of the Sony PlayStation and Microsoft Xbox releases.
Far from a complete downfall, EA expects a US$4 billion revenue for 2014.
Arvind Bhatia, analyst at Sterne Agee, commented: “Their focus on margin expansion is impressive but they’re going to have to continue to deliver on that.”
