Close
Are you sure? Are you sure you want to report this comment? I understand, report it. Cancel

EA boosts digital revenues in Q2

EA boosts digital revenues in Q2

Tue 29 Oct 2013 8:14pm GMT / 4:14pm EDT / 1:14pm PDT
MobilePublishingFree-to-PlayFinancial

Publisher loses $273 million but games like Plants vs. Zombies 2 and Real Racing 3 continue to bring in huge digital sales

Electronic Arts has released its second-quarter earnings report for the period ended September 30. On a GAAP basis, the company lost another $273 million (narrowed from last year's Q2 loss of $381 million) but digital net revenues showed major growth, climbing on a GAAP basis from $324 million to $450 million. EA's entire net revenues for the quarter totaled $695 million, so digital comprised nearly two-thirds. That's quite a transformation for the publisher that used to be so reliant upon packaged goods.

The games behind the digital growth were The Simpsons: Tapped Out, which eclipsed $100 million in life-to-date digital net revenue, Plants vs. Zombies 2, which has been installed over 25 million times on iOS devices since launching in August 2013, Real Racing 3, which has been downloaded over 70 million times and is currently averaging 18 million monthly active users, and FIFA, which has seen digital net revenue generate over $145 million in the first half of fiscal '14 (up over 25 percent compared to the first half of fiscal '13).

"EA's strong second quarter was driven by great title launches, continued digital growth, and financial discipline," said Chief Executive Officer Andrew Wilson. "While we have made good progress in the first half of the year, we remain focused on executing our FY14 plan and delivering a full slate of amazing games and services to players on current and next-generation consoles, mobile, and PC."

For the full fiscal year, ending next March, EA is expecting GAAP net revenue of approximately $3.55 billion with a loss per share around $0.72. For the third quarter, EA's outlook is for GAAP net revenue of $775 million with a loss per share of about $1.42.

16 Comments

Morville O'Driscoll
Games Blogger & Journalist

1,374 1,020 0.7
And not a single mention of Origin. Surprising. Surely if there were any positive news regarding it, it would be mentioned?

Posted:5 months ago

#1

Christian Keichel
Journalist

416 561 1.3
That's quite a transformation for the publisher that used to be so reliant upon packaged goods.
Does this mean a transformation from a company generating profit to a company bleeding money?

Posted:5 months ago

#2
Funny the difference how some media reported this:

>EA reports $273 million loss in second quarter of fiscal 2014 [Joystig]

Makes me wonder how GI.Biz will cover the other bad news from the big publishers in the coming weeks?

Posted:5 months ago

#3

Lewis Brown
Snr Sourcer/Recruiter

194 41 0.2
Remember like most Publishers the majority of revenue still comes from the 3rd (Xmas) period Quarter. So smaller loss in Q2 make a big difference. That 108m less is a good result for this quarter and should drop onto that bottom line come year end.

Edited 1 times. Last edit by Lewis Brown on 30th October 2013 11:15am

Posted:5 months ago

#4
Lets see what the final tally is after the Christmas sales. That should fortell how the year went in total

Posted:5 months ago

#5

Christian Keichel
Journalist

416 561 1.3
Remember like most Publishers the majority of revenue still comes from the 3rd (Xmas) period Quarter. So smaller loss in Q2 make a big difference. That 108m less is a good result for this quarter and should drop onto that bottom line come year end.
It's not 108m, but $108m, that's 68m. So it's definitely an improvement, but EA has reported a loss in q3 last year, so if there isn't a significant change, they will most likely stay in the red.

Edited 1 times. Last edit by Christian Keichel on 30th October 2013 11:32am

Posted:5 months ago

#6

Lewis Brown
Snr Sourcer/Recruiter

194 41 0.2
@Christian You are correct, I have spent to long hitting the key :-).

Posted:5 months ago

#7
Fair enough but I'd like to see a story explaining how they are still losing money hand over fist even with such huge games in their portfolio. Isn't that interesting too? It must be almost a decade of losses now - how the heck are they still going? We could all learn from that :P

Posted:5 months ago

#8
Could be ongoing costs of staffing , pensions, etc...

Posted:5 months ago

#9

Derek Fitzgerald
Director, Quality Assurance

6 7 1.2
I'd encourage everyone in the comments thread here today to take a look at GAAP v Non-GAAP accounting. There's a reason the stock is up ~8% today. Given digital services, a very significant percentage of revenue received in the preceding three months is deferred over the next 12-24 months. Every financial analyst covering the industry focuses on Non-GAAP, which shows a profit of 33 cents a share on $1.05B.

Morville - I think most people one this site are very aware you are a huge proponent of Steam. That doesn't mean Origin is failing. It is broken out in some of the comments/colour EA Exec has provided, such as Battlefield Origin Pre-Orders up 35% v BF3. Ultimately it's commerce comes through the products released on the platform, so breaking it out individually can be a bit counterintuitive.

Posted:5 months ago

#10

Morville O'Driscoll
Games Blogger & Journalist

1,374 1,020 0.7
@Derek

That's fair. Fyi, it wasn't meant as an anti-Origin/pro-Steam comment, but rather a genuine question. It seems a little counter-intuitive to mention digital revenue, but not mention increases in the Origin platform (such as more third-party titles or increases in install-base).

Also, I hope that my comments re: Origin/Steam aren't entirely disregarded simply because of a perceived bias. :)

Edit: Not to labour my point, but my original comment was based on Origin being mentioned in the Q1 FY14 Report. Hence my surprise at it not being mentioned here. :)

Edited 3 times. Last edit by Morville O'Driscoll on 30th October 2013 6:21pm

Posted:5 months ago

#11
@Derek cheers for the insight sir

Posted:5 months ago

#12

Derek Fitzgerald
Director, Quality Assurance

6 7 1.2
@ Barry - Welcome!

@ Morville - fair follow up. Those are questions I don't have the answers for, or if I did, am not authorized to share. :) One comment that is fair to make tho is that there are many spokes in the wheel, persay, and each of them will not get coverage in a summary each Q that's designed to give broad perspective on business trends, and that needs to adapt to the prevalent narrative in the market about the company & industry (i.e. right now - it's pretty obviously focused elsewhere in mainstream industry coverage). Regarding your preference for Steam: fair play, of course. I do tend to notice (fair or not) that you have many comments near the top of threads with relationship to EA/Origin, however, that seem to anticipate Origin failing/losing. I.e. 1st comment today: "Surely if there were any positive news regarding it, it would be mentioned?" Take that as you will.

Posted:5 months ago

#13
This ain't WMD's - I am not going to keep on waiting for good news,i remember oh so well the same comments about Atari, only for the post to be removed when the reality set in. With the news about Blockbuster, it will be hard to defend anyone in the face of a possible console down turn!

Posted:5 months ago

#14

Morville O'Driscoll
Games Blogger & Journalist

1,374 1,020 0.7
@Derek

Mmm... Yeah, I get your point. It's all down to frame of mind - whilst Origin seems big, investors, or business commentators in, say, the NY Times won't care about it unless it's drastically altered benefits for EA for better or worse. :)

Re: My comments. That's fair. I'm very much oriented to the PC end of things, so I tend to comment more on PC articles, and Steam/Origin are "big" topics within that. But I do try hard to separate my personal feelings ("Yey!Steam!") and try to be objective (must try harder :p ).

Edited 1 times. Last edit by Morville O'Driscoll on 30th October 2013 11:17pm

Posted:5 months ago

#15

Login or register to post

Take part in the GamesIndustry community

Register now