Electronic Arts quarterly report: revenue fell by 15%, and profit — by 78%

Data for the second quarter (July-September 2020)

• The publisher’s quarterly revenue reached $1.15 billion, which is $197 million less than last year’s EA earnings in the same period. But the company was ready for such a scenario — its forecast for the quarter was even less ($1.12 billion).

Comparison of real and predicted EA indicatorsEA’s profit fell most noticeably.

• From June to September, the publisher received only $185 million, which is 78% less than the net profit of the second fiscal quarter of 2020 ($854 million). However, it is worth noting that the amount of the previous profit was affected by tax benefits, which were not present this year.
• EA management explains the drop in revenue by postponing the launch of two significant franchises. For example, the release of Madden NFL 21 took place a week later than Madden NFL 20 in 2019. The start of FIFA 21 was postponed until the next quarter.
• Nevertheless, in three months EA has released four tiles at once: UFC 4, Madden NFL 21, Rocket Arena and Star Wars: Squadrons. For comparison, in the first fiscal quarter, only two projects reached release — Burnout Paradise Remastered and Command & Conquer Remastered.Most of the revenue came from gaming services – $644 million out of $910 million.
• The main drivers were Madden Ultimate Team and FIFA Ultimate Team.

The ratio of revenue from regular games and game services. Games-services are indicated in blueConsole players are traditionally responsible for the largest percentage of gaming revenue — 56.3%.

• Next come PC gamers — 24.7%. Mobile device users brought in the remaining 19%.

The ratio of revenues from console, mobile and PC platforms. Consoles are indicated in gray, PC platforms are blue, and mobile is redData for twelve months (ended September 30, 2020)

• But EA’s revenue from October 2019 to September 2020 exceeded the revenue of the same period of the previous year by 10%. This time, the publisher earned a total of $5.59 billion, instead of $5.08 billion
• Operating cash flow has crossed the $2 billion milestone, which is the best result in the company’s history.
• At the same time, EA’s profit was still much lower than a year ago — $ 1.3 billion, instead of $2.7 billion.
• As in the case of the situation in the second quarter, during the year the most voluminous receipts came from games services. In just twelve months, they brought in $3.9 billion (an increase of 15%). At the same time, the greatest contribution was made by FIFA Ultimate Team.

Dynamics of game servicesConsoles predictably became the most active in terms of the number of gaming receipts again — $ 3.6 billion.

• The PC segment remained in second place — $1.13 billion. The third place went to mobile — $773 million.

The ratio of revenues from console, mobile and PC platforms. Consoles are indicated in gray, PC platforms are blue, and mobile is redThe number of subscribers willing to pay for EA games has grown to 6.5 million people.

• And the total size of the subscribed audience reached 330 million.
• Against the backdrop of annual successes, EA announced the launch of a share buyback and decided to pay dividends for the first time. One share will bring the owner $0.17.

Successes of individual EA titles

• Over the past twelve months, the audience of Madden NFL 21 has increased by 30% year-on-year.
• Since the launch, 35 million console and PC gamers have played FIFA 20. Moreover, the franchise has gained particular popularity in Asian countries. According to the management, in the period from July to September, FIFA Online broke engagement records in China and Korea.
• In the second quarter of 201, Apex Legends grew by 24% compared to last year (the exact figure is not given). Also, in just two years, the game has received net revenues in excess of a billion dollars.

Forecast for the fourth quarter and year

• EA expects net revenue for the fourth quarter to be $1.67 billion. At the same time, revenues alone will account for about $2.3 billion.
• By the end of the code, the publisher plans to earn at least $5.62 billion. The estimated net revenue is $5.9 billion.

Comparison of previous and future indicators: revenue, receipt, cash flowBy December 2020, the publisher is going to publish four more titles: FIFA 21, Medal of Honor: Above and Beyond, Need for Speed: Hot Pursuit Remastered and NHL 21.

• In the coming months, EA intends to announce a release date for some other games, among which there will be original projects and a remaster. We are probably talking about a Mass Effect remaster.

Also on the topic:

• Electronic Arts called the last quarter unprecedented for its businessEA was criticized after advertising loot boxes for FIFA 21 in a children’s magazine
• In Canada, EA was sued over loot boxes
• Is there any news?