Financial reports are the prime time for companies to stand up and point out everything they did right over the latest financial period. It's a time to lay your cards on the table to your investors and let them know why they invested so much into your company. And that's exactly what we got from EA's financial report for the third quarter of this fiscal year.
EA have a lot to crow about; they're easily one of the world's largest publishers of video games, with dozens of current hit games to their name. Just hearing "EA Sports" before a sports game has become almost as iconic an experience as playing the sports franchises themselves, and this year, soccer simulator FIFA 17 has been an even bigger success than normal. Always a big seller around the world, FIFA 17 has been particularly popular this year, enough for EA to proclaim FIFA 17 as the most popular console game of the year. While that's hard to back up, it's certain that the addition of FIFA 17 into many Black Friday console deals probably helped boost sales numbers of the game.
The FIFA series has also reached special significance with the addition of the FIFA Ultimate Team mode. Essentially a CCG for soccer players, FUT allows FIFA players to build a collection of their favorite soccer players and compete in worldwide leagues. Win games and you win more coins to buy more footballers. Win enough games and you take your team into a higher league to compete against more skilled players. It's clearly a popular addition to the game, and in FIFA 17 EA have seen that popularity increase 22% over the popularity of FUT in FIFA 16. New mode "The Journey" has also been a big hit, with over ten million players taking the plunge into the life of a soccer hopeful.
Of course, FIFA is only a single part of EA's presence in the sports video game marketplace, and the company have promised that 2017 will see not only FIFA 18, but Madden NFL 18 (in the Frostbite engine, no less), a new NBA Live, a new UFC game, and NHL 18. EA are clearly looking to increase their dominance of the sports video game world, and might be looking to increase the visibility of their games as well, with an increased focus on eSports and competitive tournaments. After successes in 2016 with live tournaments, EA will be increasing their number of tournaments to "dozens of competitions," including the FUT Championship Finals and the Madden Championship.
Outside of the sports scene, Battlefield 1 is another of EA's massive hits of the year, and it's no surprise that the shooter took a prominent place in EA's presentation to investors. EA have proudly proclaimed Battlefield 1 to be the biggest Battlefield launch ever, with player numbers 50% larger than that of a comparative launch period for Battlefield 4. While that may not be an entirely fair comparison—Battlefield 4 followed a fairly similar game in Battlefield 3, whereas Battlefield 1 had little in the way of direct competition in setting—it's still an impressive milestone for the series. EA also pointed out that a third of those players are also new to the Battlefield series, proving that the risk in moving time period begat many rewards. The addition of new maps, new armies, and new content are expected later in this year, and it's likely that EA support for Battlefield 1 will continue for a good part of 2017. EA also announced their intention to develop competitive tournaments for Battlefield 1, increasing their commitment to competitive eSports.
Titanfall 2 also got a name drop, though it was little more than that. Despite disappointing sales that might be due to launching against two of the most popular shooters of the year, Titanfall 2 was critically well reviewed, and EA seem to have recognised this:
"Player satisfaction scores for Titanfall 2 are among the highest in our portfolio, showing just how much fun players are having with this game. Titanfall 2 will be played for a long time to come, with new maps, modes and content updates continuing to expand the experience and engage our players. We’re excited about our long-term plans for the Titanfall franchise."Naming it as a franchise should be a relief to Titanfall fans, who must have been worried that their favorite sci-fi shooter would be dropped after a tough 2016.
One of the more exciting mentions is that of Star Wars: Battlefront 2. EA have previously let slip that this game is in the works, and the presentation gave us a better look at another dream come true for Star Wars fans. EA seem to have listened to the fanbase, giving players the option of a singleplayer campaign; an option bizarrely missing from Star Wars: Battlefront 2015. They have promised that this game will have more locations, more characters, and more events from across the new Star Wars canon. The game is such an ambitious project that EA currently have three studios working on it: Battlefield veterans DICE, action-adventure specialists Motive, and Need for Speed developers Criterion. It's not hard to imagine which areas of the game EA hopes each developer will excel at, and hopefully the combination of the three studios will lead to an amazing Star Wars licence, rather than a "too many chefs" situation.
Finally for console games, following the release of Mass Effect: Andromeda in March, Bioware also have something else up their sleeve. An entirely new IP, which will supposedly revolutionize the way we see multiplayer action, set in an entirely new universe. This release is slated for the end of the fiscal year, strangely close to Mass Effect: Andromeda's release date, if this is true. With little information available, we'll simply have to wait and see to find out what Bioware have planned. One thing is for certain though, since it's a Bioware game, you're going to be able to get down with somebody.
EA's biggest recent move has been into mobile gaming. With mobile versions of many of EA's most popular series now available on iOS and Android, games like SimCity BuildIt and The Sims FreePlay have helped propel EA to a record quarter in Android and iOS games. An increase of 7% has seen EA achieve net sales of $174 million in the mobile marketplace, their popularity also making them the most downloaded mobile publisher. And much like other areas of EA's portfolio, Star Wars has a special presence here too. Star Wars: Galaxy of Heroes has been a major part of EA's success in this area, with averages for player playtimes rising to a whopping 155 minutes a day. That's a lot of time spent on the toilet.
With mobile gaming becoming a bigger part of EA's repertoire, going forward we can expect to see more and more of EA on our smallest devices.
On the boring side of things, EA hit a record quarter this fiscal year, chalking up their first ever billion dollar quarter in revenue. Generating $1.1 billion dollars in cash, this record breaks the former record set in Q3 of last financial year, raising the bar by $226 million. Net sales figures for the company broke yet more figures, with overall net sales hitting $2.07 billion and digital sales hitting $1.1 billion.
Digital distribution can also be highlighted as one of EA's major successes this year. Despite the negative air that still surrounds it as a platform, this has been the year that EA's digital store Origin and subscription services EA Access and Origin Access really took off. EA/Origin Access saw an increase of 16% in subscriber numbers, contributing $104 million to net sales. Digital sales were the massive winner this quarter, with full game sales and downloads increasing over last Q3 by an incredible 82%—$355 million in net sales. With this, and the fact that 32% of EA's unit sales were digital, it can be sure that EA will be investing more into their digital distribution arm in the years ahead.
Sales of "freemium" content and extra sales also increased by 28% to $462 million. As already mentioned, packs of random players as a part of the FIFA Ultimate Team are highlighted as a massive part of this, but the China release of FIFA Mobile 3 can also put its name down as a worthy contributor to this milestone.
EA has recorded a very strong third quarter for this financial year. The absolute dominance of Battlefield 1, FIFA 17, and other hit games across the Black Friday and Christmas periods has allowed EA to post record-breaking increases in business. Increasing their predictions for the end of the financial year to $4.8 billion in revenue, they clearly expect this trend to continue. No small amount of cash for no small amount of company.
Quick take
What goes up must come down? Perhaps. For the moment EA's star is on the rise, and it's easy to see why. It's arguable that Battlefield 1 was the clear winner over its Call of Duty rival this year, and FIFA 17 has clearly done amazing work for the EA Sports side. With an increase in annual revenue predicted, this is a trend that EA are willing to bet will go on.Can EA's dominance over the marketplace continue? Or is this a high point for EA as far as you can see? Let us know in the comments down below.
