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Game publisher Electronic Arts has announced earnings results for its big holiday quarter that ended December 31, and the company is doing great, with live services AKA microtransactions helping fuel the publisher to some big numbers, though it wasn’t all good news.
Total revenue for the three-month period was $1.673 billion, compared to EA’s projection of $1.675 billion. For the trailing 12 months, EA pulled in revenue of $5.956 billion, which is up 8% year-over-year. Looking at money in the bank, EA made a profit of $1.179 billion for the trailing 12 months, compared to a profit of $2.83 billion for the same period last year (though this number includes the impact of a one-time tax benefit).
EA also called out its EA Sports games for their performance, reaching more than 230 million people in the past year. FIFA’s Ultimate Team mode, meanwhile, reached a new record high of 6 million daily active players in December 2020.
Apex Legends saw a 30% growth in players year-over-year, while The Sims 4 continues to be a juggernaut with new records for daily, weekly, and monthly average players in December 2020. The game has reached more than 33 million players to date.
EA’s results of live services were driven by better-than-expected results from its various Ultimate Team modes for sports games, as well as Apex Legends. Additionally, EA said the mobile category continued to grow in terms of live services, led by Star Wars: Galaxy of Heroes and FIFA Mobile.
Live services, or microtransactions, continue to be a bright spot for EA. For the previous quarter, EA made $951 million from live services, which compares to $722 million from full-game sales. EA turned a profit of $211 million for the quarter, down sharply from a profit of $346 million during the same quarter last year.
For the trailing 12 months, EA made $3.951 billion from live services, which was up year-over-year. EA CFO Blake Jorgensen says he sees a bright future for live services at the company.
“We’ve built our live services for longevity. FIFA and Madden have both been around for decades. Measured over the last ten fiscal years, the FIFA franchise has grown at a CAGR of nearly 50% and Madden at nearly 60%. The Sims 4 is on track for its sixth consecutive year of growth, and Apex Legends for its second, at the beginning of what we hope will be a similarly long run for this title,” the executive said.
EA’s goal with live services is to “extend and enhance” the experience of its games. EA pointed to a number of statistics that show that this is already working, such as a 177% year-over-year growth for FIFA Ultimate Team and growth in microtransaction sales for the Madden series. Additionally, EA said The Sims 4 is tracking for its sixth straight year of increasing microtransaction sales, with Apex Legends approaching its second year of live services growth.
Another positive stat for EA that came out of the earnings release is that 62% of games sold on console over the past 12 months were digital, compared to 49% for the year prior. This increase in percentage is abnormally high, and it’s surely due in part to the COVID-19 pandemic that is accelerating the trend of buying games at home instead of going out to a store.
The announcement also includes some commentary around EA’s forthcoming and proposed acquisition of racing studio Codemasters. The deal will help EA grow its presence in the racing category, the company said, while it will also give EA new IP and technology to help the company come out with new racing games annually.
Also during the call, EA CEO Andrew Wilson confirmed that EA is developing more sports games, including one that will be released in the next fiscal year. This follows a report that EA is bringing back its PGA Tour series. No specifics yet, however, on the new games were divulged.
EA also said during the call that it is working on more Star Wars games with Lucasfilm Games. Its various Star Wars games over the decades, across Battlefront, Jedi Fallen Order, and others, have combined to sell 52 million copies, and more games are coming from these franchises and others in the future, management suggested. Battlefront 1 and 2 have combined to sell 33 million copies, with Jedi Fallen Order adding 10 million in sales. Additionally, the entire Star Wars series has generated $3 billion in revenue for EA, with Galaxy of Heroes leading the way with $1 billion by itself.
Also during the call, Wilson discussed the future of BioWare. Wilson said the studio has seen “blips” in recent years (a presumed reference to Anthem), but he remarked that these things happen when a developer innovates and tries new things. Overall, Wilson said EA feels “very confident about their future roadmap.” On the subject of the staff turnover, with Casey Hudson and Mark Darrah leaving BioWare, Wilson said he has respect for both of them and he remarked that staff turnover often happens in creative fields and it’s not necessarily a bad thing. Overall, Wilson said he feels very good about the ongoing leadership of BioWare.
