With discounts not driving sales of its games, it's on to plan B for Electronic Arts Inc. (ERTS), which includes a focus on aggressive cost-cutting, targeting more games for the red hot Wii console, and thinning out its puffed-up portfolio.

While some analysts expressed their disappointment in the new steps outlined Tuesday, shareholders seem to like the plans. Electronic Arts shares were up more than 5% in after-hours trading.

The Redwood City, Calif.-based video game maker now plans to cut 1,100 jobs, or about 10% more than previously announced, and close a dozen plants, which is twice what it had previously disclosed.

Also, rather than producing a slate of primary titles and scores of second and third-tier games, Electronic Arts now plans to focus on making far fewer games, and only ones along the lines of well-known game franchises like "Sims," in part to make better use of marketing spending. The titles Electronic Arts announced Tuesday for its fiscal 2010, starting in March, are 14% fewer than its fiscal 2009.

Electronic Arts also plans to focus on making more best-selling titles for Nintendo Co.'s (NTDOY) Wii console, which is one of the bright spots in the game industry, and is helping to drive overall growth of video games.

Electronic Arts has seven Wii titles in the Top 50, and none ranking above the top 20. "We need to move further up the charts," Electronic Arts Chief Executive John Riccitiello said during a conference call with analysts.

The moves comes too late to salvage Electronic Arts' fiscal 2009, in which it dramatically discounted games in order to drive sales. But conditions are deteriorating, so much so that Electronic Arts on Tuesday pushed back the release date of three major new releases - including a potential blockbuster sequel to the "Sims" franchise - to shift those profits and revenues to the next fiscal year.

The company now expects a fiscal 2009 adjusted loss of 35 cents a share on revenue of $4.2 billion to $4.25 billion. The adjusted revenue is seen at $4.1 billion.

"A complete disaster," Mike Hickey, analyst with Janco Partners, said. "EA didn't do an adequate job. They are lacking any sustainable growth engine in my view."

The company had already lowered its fiscal 2009 earnings expectation to a range of $1 to $1.40 a share in October, though it stood pat at the time on its revenue guidance of $4.9 billion to $5.15 billion.

For its fiscal 2010, Electronic Arts expects a better showing. It sees adjusted earnings of $1 a share in its fiscal 2010, a 40% gain from what analysts expect it to report in its current fiscal year, and flat fiscal 2010 revenue growth. Both estimates are way below consensus expectations.

The new emphasis dovetails with a worse-than-expected fiscal third quarter that Electronic Arts reported Tuesday. Trading of Electronic Arts shares was halted for a short time after hours.

The company, well known for its "Rock Band" and "Madden" sports franchises, reported a net loss for the quarter ended Dec. 31 of $641 million, or $2 a share, compared with a year-earlier net loss of $33 million, or 10 cents a share. The latest quarter included charges of $368 million for the impairment of its wireless business and $244 million for a valuation-allowance reserve on deferred tax assets.

Excluding stock-based compensation and those other items, the company's earnings fell to 56 cents a share from 90 cents.

Revenue rose 10% to $1.65 billion, excluding a deferred-revenue benefit from online-enabled packaged goods games and digital content. Including the benefit, revenue was up slightly to $1.74 billion.

A Thomson Reuters analyst survey projected adjusted earnings of 88 cents on revenue of $1.9 billion, excluding the deferred-revenue benefit.

Electronic Arts' gross margin fell to 44.1% from 48%. The company has been slashing prices to prime the pump for sales. Electronic Arts Chief Financial Officer Eric Brown, in an interview, said the company also had a higher mix of less profitable games sold.

Electronic Arts shares are off more than 70% from their 52-week high of $54.81 in May.

-By Jay Miller, Dow Jones Newswires; 201-938-2331; jay.miller@dowjones.com

(Ben Charny contributed to this report.)

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