Despite an increase in game quality, EA announced miserable financials for its fiscal Q3, along with further job cuts and a reduced outlook for fiscal 2009.

The publisher announced Q3 net loss of $641 million, up from a $33 million loss a year ago. Revenue was $1.65 billion, up from $1.5 billion for the comparable quarter a year prior.

EA said that it would be cutting around 11 percent of its workforce, or around 1,100 people, close 12 facilities and narrow its product portfolio. Previously, EA anticipated cuts amounting to 10 percent of its total headcount.

Three-fourths of the job cuts are expected to take place before the end of the fiscal year, the firm said.

Trailing-twelve-month operating cash flow was $82 million versus $267 million a year ago.

Due to weak sales, a stronger U.S. dollar and major delays of The Sims 3, Dragon Age and Godfather 2 into fiscal 2010, EA now expects current fiscal year net revenues of between $4.2 and $4.25 billion, and diluted loss per share of around 35 cents.

“Our holiday quarter came in below our expectations and we have significantly reduced our financial outlook for fiscal 2009, a clear disappointment,” said John Riccitiello, EA's CEO.

“We delivered on game quality and innovation in calendar 2008, with 13 titles rated 80 or above – more than any third-party publisher. We expect to build on this great quality record in the year ahead while delivering more profitability.”

EA said it expects to incur total restructuring charges, including severance and facility closures, of $65 to $75 million, which will be recorded over the next 12 months.

“Given our recent performance and the current economic environment, we are aligning our cost structure with a lower projection of revenue, resulting in approximately $500 million of operating expense reductions in fiscal 2010 as compared with our previous plans,” said CFO Eric Brown. Fiscal 2010 operating expenses are expected to be $2.1 billion.