Electronic Arts Inc. (ERTS), the world's biggest video game publisher, Tuesday reported a smaller-than-expected fiscal first quarter loss, but cut its full-year financial forecast, sending its shares lower.

EA's loss comes amid soft game sales and shortages of the Xbox (search) and PlayStation2 (search) game consoles. EA has also been working to balance its investments in games for next-generation consoles even as it aims to expand revenue from games for existing consoles.

In an interview, EA Chief Financial Officer attributed the reduced full-year forec CFO Warren Jenson told Reuters, referring to the company's third and fourth fiscal quarters.

The company, whose game titles include "Madden NFL Football (search)", "Need for Speed" and "The Sims," posted a fiscal first-quarter net loss of $58 million, or 19 cents a share, compared with net income of $24 million, or 8 cents a share, in the year-ago quarter.

For the first quarter, excluding certain items, the company said its loss would have been 18 cents a share. Net revenue was $365 million, compared with $432 million in the same period last year.

The company forecast net revenue for the fiscal 2006 year of $3.3 billion to $3.4 billion, with earnings of $1.45 to $1.60 a share. EA previously forecast fiscal 2006 revenue of $3.4 billion to $3.5 billion and earnings of $1.55 to $1.70 per share.

EA shares dropped more than 3 percent to $56.90 in after-hours trading on Inet, from a close of $59.00 on Nasdaq.

Analysts, on average, had expected the company to post revenue of $326.6 million and a loss of 24 cents a share, according to Reuters Estimates.

EA forecast fiscal second-quarter revenue of $600 million to $630 million with earnings between "flat" and 5 cents a share. Analysts on average had been expecting earnings of a penny a share on sales of $621.0 million.