Electronic Arts: Economic Downturn Hasn’t Yet Hit Our Gaming Consumers

Electronic Arts: Economic Downturn Hasn’t Yet Hit Our Gaming Consumers

Electronic Arts reported strong second-quarter earnings, while hinting at an expansion strategy that involves more interactive play and brand partnerships. 

The video game company reported net income of $299 million for the second quarter, up from $294 million in the previous year. Net bookings were $1.75 billion, in line with expectations, but down from $1.85 billion a year earlier. The drop was primarily due to the timing of a game launch, according to EA. 

The EA player network grew to more than 600 million active accounts at quarter end. Net revenue was $1.9 billion, up from $1.83 billion a year earlier. 

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Asked whether the company has seen any impact on consumers due to inflation or economic concerns, CEO Andrew Wilson said the company continues to see “extraordinary engagement” for titles such as FIFA, Apex and the Sims, even coming out of the pandemic. 

While the company’s guidance has been impacted by currency headwinds, EA has not yet seen meaningful shifts in consumers behavior. However, Wilson said the company plans to grow, but be “thoughtful, focused and deliberate” as it moves through the year. 

“It’s hard to ignore all of the narrative around us and some of the commentary around what might be challenging macro economic times, particularly in Europe,” he said. 

In the second quarter, EA released FIFA 23, which appears to be the most successful launch in franchise history, according to the first four weeks of data, with more than 10.3 million players joining the game within the first week.

Upcoming releases include Need for Speed Unbound and NHL23 in the third quarter, and Dead Space, PGA Tour, Super Mega Baseball, Wild Hearts and another major, yet unnamed title in the fourth quarter. 

This summer, EA announced that it lost the rights to the FIFA brand, after a 20-year deal. The deal, which will expire about next year’s Women’s World Cup, would take away a key franchise from the video gaming company. 

The company has instead said it will create a new soccer brand called “EA Sports FC.” And on Monday, the company announced the launch of a new long-term deal with Marvel to develop at least three new action adventure games for consoles and PC, which could provide future growth. 

“We consider this licensed IP an incredibly important component of expanding, diversifying and casting our net wider to bring new players in,” Laura Miele, chief operating officer at EA, told investors Tuesday. 

In general, the company plans to continue to work with partners such as Marvel to deepen the gaming experience and make it more interactive for players. 

“We really think about interactive storytelling as the future form of storytelling that consumers most consumers will choose as their first form of entertainment,” Wilson said.