EA's Live Service Games Are Bringing In A Lot Of Money
The games-as-a-service model is lucrative.
Electronic Arts today reported earnings for its FY20 Q1, and in addition to confirming a delay for NBA Live 20, the report provides an overall look at how the company is performing financially.
For the April-June quarter ended June 30, EA made $1.2 billion USD in revenue, which is up from $1.1 billion during the same quarter last year. Digital revenue accounted for $1.049 billion of the $1.2 billion total, with revenue from physical game sales and other sources coming in at $160 million.
EA posted $1.42 billion in profit for the three-month period, compared to a profit of $293 million during the same period last year. The huge increase was due to a number of factors, including EA's decision to move some of its IP rights to its international HQ in Switzerland, as well as changes to the Swiss income tax rates that seem to have benefited EA in a major way.
A slide released as part of the EA earnings report also shines a light on just how substantial "live service" elements of the publisher's games are to the company's bottom line. For the latest quarter, live services, which include microtransactions and subscriptions among other elements, brought in $504 million in digital net For the trailing twelve months, live services racked up $2.461 billion for EA.
Looking at these numbers, it's not hard to see why EA--and numerous other publishers in gaming--are pushing so hard for online games that use the games-as-a-service model to keep people playing--and paying.
You can read EA's full earnings report here.
EA has numerous live service games and subscription programs. Some of the contributors to EA's bottom line during Q1 FY20 included Battlefield V, Apex Legends, The Sims 4, and Anthem, as well as the Ultimate Team modes for FIFA 19, NBA Live 19, NHL 19, Madden NFL 19, and more. As for subscription services, these include EA Access and Origin Access, while the MMO Star Wars: The Old Republic offers optional subscriptions.
Madden NFL 20's release this week kicks off the company's barrage of sports games. The Ultimate Team modes are incredibly lucrative. EA disclosed in 2017 that all of the Ultimate Team modes combined brought in $800 million annually, according to GI.biz.
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