One word: Ouch.

Since issuing a fourth-quarter earnings warning on March 21, Electronic Arts (NASDAQ:ERTS) shares have fallen from $66.35 to $52.90 at yesterday's close. After the bell yesterday, EA delivered its unimpressive fourth-quarter earnings report, accompanied by yet another bomb: The video game king expects to record a first-quarter loss.

As a result, EA shares dropped another 11% to $46.84 in after-hours trading.

Fourth-quarter revenues were down 8% to $553 million from the same period last year, supported by strong sales of games such as NBA Street3, Fight Night Round 2, Need for Speed Underground 2, FIFA Street, and a new Time Splitters title. The company also claimed three of the top 10 selling titles for the recently released Sony (NYSE:SNE) PSP handheld, with Need for Speed Rivals topping that list.

However, net income fell from $90 million (last year) to $8 million over the same period this year, or $0.02 per share. Adjusted for certain charges -- including a $21 million litigation charge related to a dispute regarding employee overtime pay -- the company earned $0.09 per share, meeting analysts' revised estimates.

And looking ahead, the road gets bumpier as the company prepares for the transition to the next-generation consoles from Microsoft (NASDAQ:MSFT) perhaps later this year, with a third-generation Sony PlayStation expected not too long after. EA expects to report a first-quarter loss of $0.22 to $0.28 per share, compared with the analyst estimate calling for a $0.04-per-share profit. Revenues are expected to fall from $432 million last year to between $300 and $340 million -- well short of the $450 million analyst estimate.

For the full year, the company expects revenues to climb 9% to 12% to between $3.4 billion and $3.5 billion. EA also forecast GAAP earnings of $1.55 to $1.70 per share, compared with the $1.73-per-share analyst estimate. The company earned $1.59 per share in the just-completed fiscal year.

EA has had it tough in the past couple of quarters, trying to compete among long-awaited blockbuster hits such as Take-Two Interactive's (NASDAQ:TTWO) Grand Theft Auto, Microsoft's Halo 2, and Sony's Gran Turismo 4. At the same time, it's become clear that EA's competitive advantage in the sports simulation is not quite as valuable as previously thought; rival Take-Two's cutthroat pricing has cut into EA's margins and led to costly exclusive licensing deals with the NFL, the Arena Football League, and the NCAA.

That said, EA is still by far the best player in the game, and I don't see things getting much worse from here. And while I don't think the stock is in value territory, I do think EA shares are reasonably priced at current levels.

Fool contributor Jeff Hwang owns shares of Electronic Arts.