eResearch | This week on the “Electronic Arts Live Fireside Chat” webinar, Andrew Wilson, CEO of Electronic Arts Inc. (NASDAQ: EA), spoke on the three pillars of growth for the Company in the long-term: (1) Content Creation, (2) Live service Games, and (3) Customer Reach.
EA is the second largest video game company by revenue and market capitalization, right after Activision Blizzard, Inc. (NASDAQ: ATVI). EA is best known for its published games of established franchises such as The Sims and Star Wars, and EA sports titles FIFA, Madden, NFL, and NBA.
Content Creation
To grow new content, EA leverages partnerships with corporations who have scalable intellectual property (“IP”), while also collaborating with national sports organizations to develop sports simulation games and eSports events.
In the webinar, Wilson stated that EA plans to “double down” on its relationship with Walt Disney Co. (NYSE: DIS), as it builds on the success of recent franchise partnerships, such as Star Wars, which sold 35 million copies through its battlefront series.
Vincent Zampella, Head of EA’s studios Respawn and DiceLA, further explained how advanced EA’s relationship is with Disney. Years of foundational collaboration has led to Disney allowing EA to develop its own story lines and characters for Disney’s IPs such as Star Wars.
EA also recently announced a multi-year agreement with the National Football League (“NFL”) and the NFL Players Association to maintain exclusivity for EA’s Madden franchise; it will be the sole game brand representing the sports organization.
Since Madden 2020 launched, the football game has grown unique players by 30% year-over-year, with more than 330 million hours of gameplay recorded. According to the NPD Group, Madden 2020 is the ninth best-selling video game so far this year.
Live Service Games
EA also experienced growth through the recent trend of Live Service Games. This category of games focuses on retaining players for long periods while making money through in-game features and other micro transactions.
One of EA’s oldest games is a Live Service game called The Sims, a real-life simulation video game that is 20 years old. When first released, The Sims was an early harbinger in the evolution of games, as it added a social aspect where players interacted outside of the game.
The Sims currently has six consecutive years of growth, 31 million live players to date, 2.7 million players added in the past two months, and Monthly Active Users (MAUs) of over 9 million. In The Sims’ lifetime, players have created over 1.6 billion characters.
Last year, EA launched Apex Legends, a Live Service game available on PC and consoles, developed to compete against the highly popular Fortnite, a battle royale style first-person shooter game developed by Epic Games.
Apex Legends gained 50 million players within its first month of launch. By the end of last year, the battle royale style game reached approximately 70 million players worldwide with 8 to 10 million users playing in a given week.
Customer Reach
To expand customer reach, EA is targeting new geographies including Latin America, India, and Asia. Expansion beyond traditional platforms will be achieved by partnering with various third-party gaming platforms, keeping games more accessible and players more connected.
Last year, EA announced a partnership with Valve to allow EA Access, EA’s gaming subscription platform, to all of the users on Valve’s Steam platform, the largest gaming network on PC.
Mike Blank, Senior VP of Strategic Growth at EA stated, “we want to make it easy to play the games you love, wherever you want to play…Delivering games to the Steam community is an important step in achieving this goal”.
In the webinar, EA spoke briefly about how the COVID-19 pandemic had little effect on its operations as most teams transitioned seamlessly to remote work environments. EA is expected to report its FQ1/2021 earnings report on July 30, 2020.
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