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Electronic Arts on Tuesday posted a major boost in net revenue over its latest financial quarter. Total net revenue was up to $1.3 billion for the three-month period ending Sept. 30 (Q2 of EA’s fiscal year 2020), an increase of nearly eight percent year-over-year.
The company’s net income saw a major increase as well, ballooning from $255 million in 2018 to $854 million this year over the same period. That was due in large part to an income tax credit of $1.7 billion EA recognized during this fiscal year as a result of a transfer of IP rights to the company’s Swiss subsidiary. Over the past quarter, Switzerland changed its income tax rates.
The price per share of EA stock was down more than two percent at the closing bell on Tuesday, but after-hours trading saw the stock rise over 1 percent to just over $95 per share.
The company credits multiplayer and sports franchises for the bump, citing an increase in the number of unique players in the soccer series FIFA‘s Ultimate Team game mode (up 22 percent year-over-year) and the NFL franchise Madden‘s Ultimate Team offering (up 19 percent year-over-year). Both Ultimate Team modes offer players purchasable packs of players and other in-game collectibles.
Both FIFA and Madden launched new titles during the quarter, with Madden NFL 20 debuting Aug. 4 and FIFA 20 bowing Sept. 24.
Also revealed in Tuesday’s report is that Respawn Entertainment’s free-to-play battle royale shooter Apex Legends, which launched in February, has hit 70 million total players. CEO Andrew Wilson called the title a “major long-term franchise” for the company.
Meanwhile, The Sims 4, first released back in 2014, saw a 40 percent growth in monthly average players year-over-year. “It was an excellent second quarter for Electronic Arts,” said Wilson.
EA expects net revenue for the entire fiscal year 2020, ending March 31, to be roughly $5.4 billion, while net income is expected to hit $2.8 billion ($1.7 billion of which is from the aforementioned tax credit).
With another major release slated for launch next month — Respawn’s Star Wars Jedi: Fallen Order on Nov. 15 — EA is projecting net revenue of $1.5 billion and net income of $272 million next quarter.
Wilson noted that the recent launch of Disneyland’s Galaxy’s Edge attraction and the upcoming debuts of the Disney+ series The Mandalorian and Star Wars Episode IX: The Rise of Skywalker make Fallen Order‘s release window an opportune time for the title to debut. COO-CFO Blake Jorgensen also reported that EA’s previous two Star Wars titles (2015’s Star Wars Battlefront and 2017’s Star Wars Battlefront II) have sold 32 million copies combined worldwide.
EA also revealed that a new entry in the Battlefield series is planned for fiscal year 2022. “The goal is to really take advantage of the larger player base of the new console generation,” Jorgensen said during an earnings call, referencing the new console offerings from Sony and Microsoft due to launch next holiday season. Holding the release of Battlefield until fiscal year 2022, he said, will allow time for more players to migrate to the next-gen systems.
“When we thought about building for the next Battlefield … it became apparent to us that launching into the next-gen platforms was going to offer a tremendous opportunity for innovation, but we wanted to give the install base time to grow,” said Wilson.
When asked if Respawn is still working on the anticipated third installment of the Titanfall series, which was postponed by the launch of Apex Legends, Jorgensen said, “We really want to keep the team hyper-focused on Apex. I can’t give you a sense of if and when [Titanfall 3 will come]. We certainly won’t forget about it.”
Earlier on Tuesday, the company revealed a partnership with Valve’s online storefront Steam to offer its subscription service, EA Access, on the platform.
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