The Associated Press is reporting EA's income is falling, and layoffs of 6% of jobs at the game developer's studio will occur!

Video game publisher Electronic Arts Inc. posted a wider quarterly net loss Thursday and said it is laying off about 6 percent of its work force to cut costs as it heads into the most lucrative season for the games industry.

Higher development and marketing costs led to the bigger loss for the July-September period. The quarter's revenue surpassed Wall Street's forecast thanks to the success of games like "Spore" and "Madden NFL 09," but the company did not exude the cheery optimism that has characterized the video game industry in the past few months even amid the economic turmoil.

"Considering the slowdown at retail we've seen in October, we are cautious in the short term," said John Riccitiello, chief executive, in a statement. "Longer term, we are very bullish on the game sector overall and on EA in particular."

What this means for Warhammer Online remains to be seen!

The company lost $310 million, or 97 cents per share, in the quarter, the second in its fiscal year. That was worse than the loss of $195 million, or 62 cents per share, a year earlier.

Sales jumped 40 percent to $894 million.

Excluding one-time items, EA says it lost 6 cents a share in the latest quarter, matching the expectation of analysts polled by Thomson Reuters.

Adjusted sales, which exclude deferred revenue for some online games, were $1.13 billion, beating expectations for $1.08 billion.

Chief Financial Officer Eric Brown said the company remains "cautiously optimistic" about the holidays. EA, like other video game companies, makes the bulk of its money in November and December.

"We have heard that retailer foot traffic is down in general, which is a negative," he said in an interview. "But we also know that retailers are increasing their shelf space (for video games ahead of the holidays)."

EA lowered its full-year profit outlook range because of the strengthening dollar and the delay of the latest "Harry Potter" game, though EA kept its revenue forecast intact.

The job cuts will amount to between 500 to 600 positions across all functions and locations, EA said. While some of these jobs are open, most will involve layoffs.

Shares of the Redwood City, Calif.-based company sank $4.03, or 14.5 percent, to $23.70 in after-hours trading. The stock had closed down 31 cents at $27.73.