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SAN FRANCISCO -(Dow Jones)- After promising too much, Electronic Arts Inc. (ERTS) may now be promising too little.

On Monday, the publisher of popular videogame titles, like "The Sims" and "Madden NFL," disappointed investors, saying earnings in its current quarter would likely be half of what analysts forecast.

The Redwood City, Calif.-based company made the forecast as it reported its third-quarter loss had narrowed from a year earlier. It said its revenue in the quarter, which contained the important holiday shopping season, had fallen 25% as sales of a popular music game waned and European gamers tightened their purse strings.

"We decided to be a little more conservative," Chief Executive John Riccitiello said during a conference call to explain the earnings. "We haven't seen enough data that purchase behavior is yet there in spades."

The tepid guidance marks a change of strategy for EA. For years, the company was known for its aggressive forecasts, which often proved too optimistic. In mid-January, analysts criticized EA when it drastically lowered its original guidance for the fiscal year to between 40 cents and 55 cents a share, down from an earlier estimate of 70 cents to $1 a share.

Now, analysts say, EA is trying to make up for it by issuing more reasonable guidance.

"Management has been burned by over-promising and under-delivering," said Todd Greenwald, an analyst at Signal Hill. "So they really need to set expectations low."

An EA representative didn't respond immediately to a request for comment on its guidance policy.

Of course, it might take time for investors to gain confidence in EA's new approach to guidance. On Monday, shares of EA closed the regular session at $17.49. After the earnings guidance, they dropped to $16.04 in after-hours trading.

One example of EA's sober new approach came through in the granularity of one of its forecasts. The company said sales of games loaded onto discs likely will fall 3% in 2010. That's much more conservative than competitor THQ Inc. (THQI), which said last week it sees so-called "packaged goods" videogame sales would be flat to up single-digit percentages in 2010 compared to last year.

Analysts say the very different views underscore EA's newfound effort not to disappoint the market.

"While I don't think they are right on every line item, it's nice to see where they think they will end up," said Michael Pachter, a Wedbush Morgan analyst. "This time, I do trust the guidance."

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