35% or more of EA Sports players spend on Ultimate Team

CFO Blake Jorgensen says publisher focuses on getting people into the funnel, not on making payers spend more

Electronic Arts' Ultimate Team game modes have an impressive conversion rate. Speaking at the NASDAQ 37th Investor Program today, EA CFO Blake Jorgensen broke down the numbers on its EA Sports games.

"Today about 70-75% of all the people that buy the sports games join Ultimate Team," Jorgensen said. "It's fun. It's a great way to play the game. Of those 75% of the people, about half of those people actually spend some money and the other half just play without spending. But in a free-to-play world, that's a fantastic balance of spenders and non-spenders."

He also addressed the company's strategy for growing those numbers, saying, "We spend very little time trying to get people to spend more money. We really try to spend most of our time getting people into the funnel because we know once they're into the game, they'll really have a good time, and they'll play it for a long period of time."

Jorgensen returned to that idea later in the presentation, saying that people are playing fewer games these days, but playing them for longer periods of time thanks to live services and regular events.

"This entertainment form is probably one of the greatest entertainment values for consumers," Jorgensen said. "If you go to a movie today, it can cost you in the US $20 to get in the movie before you buy popcorn, which is fun. It's great, I love it. But at the same time, a $60 video game that people are playing three, four, five thousand hours during the year on, that's a lot of value for your money. And even if you spend some money on top of that, you're typically spending it on increasing the fun and excitement of the game. So we're just trying to give the consumers what they really want, and more of it, versus trying to build another game or do something different."

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Latest comments (8)

Klaus Preisinger Freelance Writing 4 years ago
Disney bought Star Wars for $4 billion.
EA as a company lost $6 billion in value since recent discussions around their Star Wars microtransactions.

I suppose conversion rates are good news then? However, saying 3000-5000h of fun for a yearly franchise is something to be avoided. After all, a year merely has 8760h. Giving the impression EA customers play games for 12h per day is the last thing that needs to be out there. The ire EA is drawing from governments does not care whether a mechanic fits a legal definition of gambling or anything else. All they will look at, is whether EA is endangering the youth and act on that because it is an easy bi-partisan political victory to be had. A great many things are legal, while still being restricted to adults.

Minor nitpick: in a free to play world, games do not cost $60. In a video-content as a service world, Netflix costs $14, without any microtransactions on top.
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Nicholas Lovell Founder, Gamesbrief4 years ago
A 35% lifetime conversion rate, and $800 million in revenue a year. Is it any wonder that EA wants lootboxes in everything?
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Ian Griffiths Product Owner, Hutch4 years ago
@Klaus Preisinger: Look at EA's 5 year growth, 5 years ago the stock was about $15 a share, it's now at $103. Granted, that's down from a high of about $115 in the last month however, you can see similar drops with Activision, and even bigger drop with Take Two and Zynga. We can't just look at EA share prices without considering wider market contexts.

I don't know where your 3-5k hours of gameplay is coming from but it seems irrelevant to me - any game from Chess to Battelfield can be played as many or as few hours as a player wants. When I was a kid I'd get bored way before hitting anywhere near those numbers. Also, the thing with kids is - they have parents who decide when they can play games and what they can spend their money on.

SWBF2 has a 16+ PEGI rating and micro-transactions turned off it doesn't seem like much of a 'danger', not to mention there's little to no evidence to indicate a non-trivial or widespread problem. If you want to complain about loot boxes and gambling just look at the latest toy craze, LOL Babies - randomised blindboxes, that are advertised to and directly targeted at children for Christmas and barely a whisper of gambling goes by.

Edited 1 times. Last edit by Ian Griffiths on 6th December 2017 1:14am

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Show all comments (8)
Why doesn't EA try a Netflix subscription model, flat monthly feee. As many games to binge and try. And only cosmetic mtx .
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@Dr. Chee Ming Wong: You mean something like Origin Access but with DLC for the games included? I wonder how popular it actually is...
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Klaus Preisinger Freelance Writing 4 years ago
You are right that in the wider context, many video game stocks have inflated at an insane pace over the past decade.

On the other hand, whataboutism is not a valid strategy for the industry when dealing with government institutions. Whataboutism is a good strategy in relation to people who cannot hold you directly accountable.

No institution will change its opinion, because somebody else is doing "the same". Have you ever heard of one murderer going free, because the world is full of uncaught murderers? Once governments act of loot-boxes, it will be on loot-boxes alone. They will get to the other offenders in time. EA cannot expect a free pass because something else exists. The sooner EA adapt this reality into their communication strategy the better.

35% conversion rate also means 65% of regular old school customers. Which is no surprise considering EA is decades old and so are their consumers. When speaking to these consumer, EA uses the "we listen to the community" PR strategy ad nauseam. Seriously, they say it more often than Microsoft ever mentioned TV. What EA says is one thing though, the other thing is on whom EA acts, i.e. the 35% causing the spike in revenue. This is the downside of EA's strategy. They claim to listen, however the majority of their consumers and a good number of potential consumers observe EA making a run for those 35%. No matter how often EA claims that this is not at the expense of everybody else, the 65% feel as if it is at their expense.
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Klaus Preisinger Freelance Writing 4 years ago
It would be a mistake to believe that a law will be made. Existing laws will be leveraged instead, chief among them any laws and regulations connected to protecting minors. Which are way too vague for any publisher to feel happy about them. The political angle at the moment seems this. No arguments about legality. Pointing out that a great many things are legal, yet regulated when it comes to minors. Use existing structures. Notably the Bavarian advance had a ton of text justifying why a certain institution (KJM) has to be put in charge, mainly because they cannot be circumvented by existing industry groups aimed at self-regulation (i.e. USK, PEGI).

Take the most dreaded institution of Germany, the BPJM. It took years of lobbying for the industry to bypass them with legislation surrounding the USK, the industry body giving out ratings in Germany today. The BPJM was never pro-active about what it tried to remove from shelves. They never acted on their own.

Parent associations complained about Quake and the BPJM had it disappear from shelves. You could ask at the counter, but that had a chilling effect on sales. Parent associations never complained about Unreal Tournament to the BPJM and as a result, it remained on shelves. We all know that if you remove one, you probably should remove the other for the same reason, but that never happened. Even, if you were a publisher and complained about that, the answer was "the BPJM does not act on publisher complaints, if this Unreal game is something we should look at, then we will do so, if the proper channels are invoked". This is the very situation EA is in, the are id Software, not Epic Megagames in this example. It happened before, it will happen to EA.

The same applies to loot-boxes in general. A lack of complaints will create a lack of enforcement. Sounds unfair, but that is just how it is. Sure, collectible card games are the same, but nobody complained about it, that is all the difference it takes. If the German KJM decides to smack EA over the head, it will do so. If EA's response is "whatabout game x", the answer will be "won't save you, we will get to game x once a complaint has been made through the proper channels". Also remember, the mission is not to give consumers the best deal possible, it is to protect the minors. If that partially screws the consumer, then so be it. No ID and you do not look as if you were 18? Too bad for you.
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Ian Griffiths Product Owner, Hutch4 years ago
Accidentally deleted my comment by trying to delete the duplicate. Anyway, it was basically - no proof lootboxes are bad, 50% conversion is massive, most shops would love those numbers, gaming media really need to understand how popular f2p is.
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