Electronic Arts has posted worse than expected Q2 results, and has announced it will be cutting 6% of its workforce to compensate.
Around 540 jobs will be cut in an attempt to save around $50 million, after the company reported a net loss of $310 million during the second quarter of its fiscal year.
A year ago, losses stood at $195 million.
Despite the losses, revenue has risen from $640m to $894m over the past year, thanks to strong sales of games such as Spore, Madden NFL, Mercenaries 2 and Warhammer Online: Age of Reckoning.
EA Mobile has also seen a 24% rise in revenue to $47 million, but neither of these has been enough to prevent the huge losses.
Speaking of the results, EA chief executive John Riccitiello said: "Considering the slowdown at retail we've seen in October, we are cautious in the short term".
However, he sounded overall positive that things would improve over time.
"Longer term, we are very bullish on the game sector overall and on EA in particular", he said.
"The industry is growing double-digits on the strength of three new game consoles and increases in the number of homes with broadband Internet connections. EA is well-positioned to benefit from these technology drivers."
EA has said its expected overall revenue for the year will be between 4.9 and 5.15 billion dollars, which if true will be up 33-41% on last year.
However, following the announcement of its Q2 results, EA's share price fell by nearly 18% to $22.79 per share.