Electronic Arts reports 30% drop in Q1 net profit as it continues to invest in building "massive online communities"

Electronic Arts has released its financial report for the first quarter ended June 30, 2024. The company posted declines in all key business metrics, including revenue and profit.

EA Sports College Football 25

Financial highlights

• According to its new earnings release, Electronic Arts reached $1.6 billion in net revenue, down 13.7% year-over-year. Live services accounted for 85% of the total, while full-game sales were $250 million (-43.5% YoY).
• Net profit was $280 million, down 30% compared to the same period last year.
• Net bookings (calculated by adding net revenue to the change in deferred net revenue for online games) fell 20% year-over-year to $1.26 billion. However, they were still above the $1.25 guidance.
• Console remained the number one platform by bookings, accounting for 53.6% of the total. It is followed by PC (23.4%) and mobile (23%).

• “Strong execution, live events and continued player engagement across our experiences, delivered Q1 results above expectations,” Electronic Arts CFO Stuart Canfield said in a statement, adding that the company is “well positioned to deliver our multi-year financial objectives.”

Electronic Arts’ game portfolio and core franchises

• In-game events drove “better-than-expected” monetization in EA Sports FC Mobile, with EA Sports FC Mobile reaching “record net bookings” in the first quarter.
• Madden NFL “sustained momentum” through the first quarter, with its bookings up double digits year-over-year.
• EA Sports College Football 25 reached 5 million unique players in its first week, with over 500k more playing it via the EA Play trial. Interestingly, the company previously stated that over 600k users played the game via subscription.
• During an earnings call, CEO Andrew Wilson added that pre-orders for the MVP bundle, which combines Madden NFL and College Football, “performed ahead of our expectations.”
• Electronic Arts plans to further support Sims 4, seeing user-generated content as a “growth multiplier to the franchise overall.”
• Apex Legends, which experienced year-over-year declines in the previous quarters, is on track to return to growth. According to Canfield, the game’s metrics “improved sequentially and came in line with our expectations.”
• The Battlefield franchise has surpassed 25 million players over the last 12 months. Wilson also described the next major game in the series as “one of the most ambitious projects in our history.”
• Electronic Arts expects to launch Dragon Age: The Veilguard in Q3, a three-month period from October 1 to December 31). It also has an unannounced partner title scheduled for Q4 (January 1–March 31, 2025).
• EA will continue to invest in building “massive online communities” around its portfolio. Another goal is to bring its biggest franchises beyond just games, with Wilson saying that making users watch content instead of just playing it enhances the experience.
• “What we see now is, you know, 25-30% of all engagement in our industry is actually watching content, not just playing content,” Wilson noted. “Incidentally, that correlates to monetization at nearly the same levels as playing does over the course of time.”