EA Revenue Balloons Even Further Over Holiday Quarter

Courtesy of Respawn Entertainment
'Star Wars: Jedi Fallen Order'

The company launched 'Star Wars: Jedi Fallen Order' in November, which was the sixth-best-selling title of 2019 in the U.S.

Electronic Arts on Thursday posted net revenue of $1.6 billion over its most recent financial quarter, the third quarter of its fiscal year 2020, up from $1.3 billion over the same period the year before. The bulk of the number came from digital revenue, which accounted for $1.1 billion of the net revenue total. Gross profit for the quarter topped $1 billion.

The holiday season proved to be a boost for EA, which recorded net revenue of $1.3 billion last quarter (itself a nearly eight percent increase year-over-year). The new figure exceeded revenue projections from last quarter by EA, which predicted $1.5 billion in net revenue with the launch of Star Wars: Jedi Fallen Order

EA and Respawn Entertainment launched Star Wars: Jedi Fallen Order in November. The game was the sixth-best-selling title of 2019 and is also Respawn's best-selling game of all time by full-game dollar sales. EA COO and CFO Blake Jorgensen noted that Jedi's sales were expected to fall somewhere between 6 million and 8 million copies over the third quarter, but sales came in "at the high end" and he expects the title to sell 10 million by the end of the fiscal year in March.

When asked if there were plans for more content for Jedi in the future, EA CEO Andrew Wilson praised the game's dedicated fanbase but noted that future content "would be different than what we see in something like Apex Legends." He went on to say that he's "excited" about what Respawn is working on for the game.

In addition to Jedi, EA also released the racing game Need for Speed Heat and the shooter Plants vs. Zombies: Battle for Neighborville over the last quarter. Meanwhile, The Sims 4, first launched in 2014, surpassed 20 million unique players.

Jorgensen cited live services (online play and transactions in titles like Apex Legends and The Sims, for example) as one of the key drivers of revenue. “We expect live services to continue to drive growth in fiscal 2021 and for growth to accelerate in fiscal 2022, led by a new Battlefield,” added the exec, referencing an upcoming title in the shooter franchise revealed during last quarter's financial call.

Earlier on Thursday, Nintendo posted its own financial report, which highlighted growth in software and hardware sales for its Switch family of consoles. When asked if EA would publish more games on the Switch (currently, few EA titles are available on the console), Jorgensen said, "We are very pleased with how Nintendo has done. ... We're always looking at and discussing what else we can put on their platform, but we're conscious that the top-selling titles, by a longshot, [on Switch] are Nintendo software."

Heading into the final quarter of its fiscal year, EA is projecting a net revenue total of $5.4 billion and $2.9 billion in net income for FY2020.

Thursday's earnings report had little influence on EA's stock, which remained more or less even at the close of trading.