EA Sports is in digital interactive entertainment industry which develops, markets, publishes and deliver games & services that can be played on a variety of platforms, including game consoles (X-box, PS4 & Nintendo), PCs, mobile phones and tablets. Company uses brands that either wholly own (such as Battlefield, Mass Effect, The Sims and Plants vs Zombies) or license from others (such as FIFA, Madden NFL and Star Wars) to develop games.
EA Sports has an agreement with Sony & Microsoft to develop and distribute disc-based and digitally-delivered software products and services compatible with PlayStation and Xbox consoles, respectively. Similarly, with Apple & Google company has agreements under mobile platform.
As of March 31, 2018, company had approximately 9,300 employees.
Digital revenue was USD 3,450 million, up 20% (Y-o-Y).
Net bookings increased by 5% to USD 5,180 million.
International net revenue was USD 3,060 million, up 12% (Y-o-Y).
Operating cash flow was USD 1,692 million, up 7% (Y-o-Y).
Company board has authorized a program repurchase of stocks worth USD 2.4 billion.
Players increasingly purchase games as digital downloads, as opposed to purchasing physical discs, and engage with the live services that are provided by the company. Live services provide additional depth and engagement opportunities for players and include microtransactions, extra content, subscriptions, and esports. Net revenue attributable to live services comprised 40% of total net revenue during Fy18.
Company’s most popular live service is “Ultimate Team” mode associated with sports franchises. Ultimate Team allows players to collect and trade current and former professional players to build and compete as a personalized team. Net revenue from Ultimate Team is approximately 21% of total net revenue during Fy18, a substantial portion of which was derived from FIFA Ultimate Team.
Digital transformation in gaming industry is creating opportunities in platforms, business models and the way in which players engage with games and services.
- Company is highly dependent on revenues coming from FIFA title. Portfolio of successful hit games that company has designed is very few and dependency on those few titles for revenues is increasing year by year.
- Highest percentage of sales are recorded in third quarter due to seasonal holiday demand and the launch timing of games. Volatility in revenues is more significant when compared with Activision Blizzard.
- Company is expecting its esports segment to generate higher growth going forward but Activison Blizzard is the market leader in this segment with higher viewership base.
- Gaming industry is witnessing more players signing up for games because of advancement in the technology, creativity in games and online competitions.
- Company’s title “FIFA” is one of the best games with high definition graphics in the industry ,which could boost revenues for the company in esports segment going ahead.