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Live services power EA to Q1 growth

Publisher beats expectations with $1.425 billion in revenue, namechecks Battlefield 1, EA Sports Ultimate Team, The Sims 4

Electronic Arts released its results for the first quarter of its fiscal 2018 (the three months ended June 30), touting the effectiveness of its live services approach in driving revenue from games long after launch.

"Q1 was an outstanding quarter, with thriving player communities in our top franchises like Battlefield, our EA Sports portfolio, Star Wars, and The Sims continuing to grow our network and drive our digital business," EA CEO Andrew Wilson said. "We have built strong momentum, and now we are accelerating into a year of tremendous innovation, where extraordinary new games, content-rich live services, and expanding global competitions will deliver more fun for our players and fuel growth for Electronic Arts."

CFO Blake Jorgensen echoed that statement, saying, "We had a great start to the fiscal year, primarily due to our event-driven live services. Our operating cash flow was the highest ever for a first quarter, and underlines how live services have fundamentally transformed our business model. Driven by innovation and live services, we expect to continue to grow our profitability and cash generation."

EA specifically called out the effectiveness of some older titles, noting that the Ultimate Team modes for EA Sports games saw a combined growth in player population of 11% year-over-year for the quarter. Additionally, The Sims 4 on PC saw monthly active players up 30% year-over-year, and Battlefield 1 "had more than 21 million players joining the game as of quarter end." No mention was made of highly anticipated but critically underwhelming Mass Effect Andromeda, which was released at the tail end of the previous quarter.

For the full quarter, EA reported net revenues up 14% to $1.45 billion, 60% of which came from digital sales. The company also posted net income up 46% to $644 million. Both numbers beat the company's projections of $1.425 billion and $605 million, respectively.

For the fiscal second quarter ending September 30, EA is projecting net revenues of $955 million, with a net loss of $57 million.