Updated for market close at 5:00 p.m.
The publisher responsible for Battlefield, Titanfall, and Dragon Age made a lot more money last quarter than analysts were anticipating, and that has the stock market smiling.
Electronic Arts’ stock price finished trading today up 21 percent largely due to its impressive earnings report. The company revealed yesterday that it generated $914 million in revenue for the quarter ending March 31, which is more than $100 million better than what Wall Street was predicting. The company also teased a few announcements. Those include one for a new game that will debut in the fall as well as a deal it made with Titanfall developer Respawn Entertainment. All this has EA stock trading at around $33.95 after closing at $28.05 yesterday.
This is the highest EA has traded in five years.
EA’s strong performance during its fiscal fourth quarter came from a variety of sources. Its console business performed well in terms of both physical and digital sales. While digital sales were down overall, that was primarily due to slowing subscriptions for games like Star Wars: The Old Republic. Smartphone and digital full-game downloads were both up year-over-year.
Titanfall, which debuted on March 11, also managed to perform very well. EA failed to provide a specific number, but it did reveal that the game sold 925,000 physical copies just in the U.S. from its launch through March 31. That doesn’t count digital sales on Xbox One or PC or any international sales. The game obviously performed well enough to impress EA itself because the publisher announced that it closed a new deal with the sci-fi shooter’s creators at Respawn.
“Through a new publishing agreement, we’ll be working with Respawn to bring new Titanfall experience to players worldwide,” EA chief executive officer Andrew Wilson said during the conference call yesterday. That was the extent of the announcement, but Wilson is likely not referencing the planned expansions for the current Titanfall.
Wilson didn’t only tease Titanfall experiences. The CEO also confirmed “a major new game” coming this fall “powered by Frostbite 3,” which is the graphics engine Battlefield 4 developer DICE created for its visually dynamic shooters.
“We’re excited to unveil this game to our fans first, with a live reveal next month at the gaming industry’s marquee event in North America, [the Electronic Entertainment Expo trade show] in Los Angeles,” said Wilson.
EA’s reasoning for teasing the game now is to appease investors that are worried the publisher will have a down year since it doesn’t have a new Battlefield. That series is one of the company’s big drivers of revenue, but EA’s fiscal 2015 will go by without Battlefield 5.
“If you don’t have the Battlefield in the year, [you got to fill that hole],” EA chief financial officer Blake Jorgensen said. “The way we’re filling that hole is essentially new titles along the lines of FIFA World Cup, UFC, [a new] golf game, The Sims, and Dragon Age. I would say that takes up about two-thirds of the hole. The rest of the hole we are assuming will be filled by this new, unannounced game.”
Jorgensen went on to explain that with this unnamed game debuting in the fall — likely against a crowded slate of competition — the new release will have to standout in terms of quality.
“I think you will see that at E3 when you get a chance to [play] the game,” he said.
Finally, EA holds the rights to publish triple-A Star Wars games on consoles and PC, and Wilson revealed the company plans to show off more at E3. That includes the Star Wars: Battlefront shooter from its stable of DICE studios, which now includes a Los Angeles division that it opened last May.
... read more »
Powered by VBProfiles