Live services continue to bring home the bacon for EA

With two games from EA grabbing headlines at the moment – Anthem and Apex Legends – the firm held its earnings call for Q3 2019 yesterday and we think it was trying to avoid the press.

The big talking points during the call were the “failure” of Battlefield V and the success of FIFA.

Speaking about the former, chief financial officer Blake Jorgensen said, “The desire to make changes to Battlefield V led us to move its launch into a more difficult window, and prioritizing the single-player campaign over Battle Royale also hurt sales. As a result, we sold 7.3 million units in the quarter, about 1 million less than comprehended by our Q3 guidance.”

Speaking about the latter, Jorgensen revealed that sales of FIFA 19 are roughly flat to sales of FIFA 18. The firm points to “intense competition” as a reason for FIFA 19’s poor sales.

Financially speaking EA came in below guidance, with net revenue currently sitting at $1.289 billion, $89 million below what it expected.

Bringing home the bacon

As the headline of this story eludes to, live services represent a large chunk of EA’s net revenue.

During Q3 2019, EA reported net revenue from live services amounting to $480 million. As large as that number is it’s only a one percent increase from the same period last year.

What is incredibly interesting to us is how popular “full game downloads” are.

Full game downloads drew in $247 million in net revenue in Q3 2019 which represents a year-on-year change of 73 percent.

Net revenue from mobile increased 12 percent to $181 million.

All tolled, digital revenue accounts for 70 percent of total revenue while physical goods only accounts for 30 percent of EA’s net revenue.

As for games, CEO Andrew Wilson told investors that a new game from Respawn that puts a new twist on the Titanfall universe is coming this year. We would like to point out that this was uttered in the same sentence as “live service” so temper your expectations.

It also appears as if Need for Speed and Plants vs Zombies will be getting a live service treatment later this year.

There was however one slice of good news.

There is a new Star Wars game on the horizon and we should be getting it in Spring (the northern hemisphere’s autumn) and the game is called Star Wars Jedi: Fallen Order.

The development team at Respawn is being led by the former director of the God of War series.

“It’s very far along in development, and having spent time with it recently myself, it plays spectacularly well. This game truly captures the fantasy of becoming a Jedi, and we will have a lot more to share soon,” Wilson said.

So that is where EA is after three-quarters. We’re curious to see a full year of financial data but this paints a good picture of how the firm is performing.

[Source – EA, Seeking Alpha]

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