EA Earnings Up, Expanding into Social Games
Electronic Arts announced yesterday its fiscal first quarter earnings ending on June 30, exceeding early earnings estimates.
The California-based game maker reported a profit of $221 million, or 66 cents per share, on revenues of $999. This is significantly higher compared to last year, when the company earned a profit of $96 million on revenues of $815 million. On a non-GAAP basis, EA’s total loss was $123 million, or 37 cents per share, on revenues of $524 million. Last year, EA had a loss of $78 million, or 24 cents per share, on revenue of $539 million. Analysts forecasted a loss of 40 cents per share on revenue of $508.6 million.
Much of EA revenue is from strong sales of shooter games such as Portal 2 and Crisis 2. EA’s first shooting game, Battlefield Bad Company 2, was very successful as it sold more 9 million units to date. Sports games like FIFA 11, Tiger Woods PGA Tour 12: The Masters and NCAA Football 12 also have impressive sales.
EA has been one of the leading publishers of console games. However, console games sales have been declining since more consumers are now more inclined on social and mobile games. Just this month, EA tries to expand into digital platform with its acquisition of PopCap Games, the maker of hit games like Plants vs Zombies and Bejeweled, for $750 million.
“Eighteen months ago there was no iPad, Google was experimenting with Android and big games were limited to a single revenue opportunity at launch,” EA Chief Executive John Riccitiello said on a conference call with analysts. Now, he said, “the fastest-growing revenue streams for console, PC, smartphones and tablets are all [over the Internet.]”
Following the success of Battlefield Bad Company 2, EA is gearing up for the release of Battlefield 3 on October 26 that will go up against close rival Activision Blizzard’s Call of Duty Modern Warfare 3. The new game features a Battlelog, which enables players to compete with other players. EA is also launching another version of its Madden franchise next month. The resolution of NFL’s lockout was a big relief for the company as it would have derailed its pending launch.
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