Business Model | Forecast/Sales | News

Electronic Arts Digital Revenue Increases

EA Origin-SJULY 26, 2011 • In a financial conference call, Electronic Arts said its digital (online distribution) business for the quarter ending June 20 increased by 24% year-over-year.  Non-GAAP Electronic Arts digital revenue reached $209 million. DLC and F2P micro-transaction content for the period was $70 million in Q1, up 32% versus 2010. Mobile and other handheld digital revenue was $59 million, up 9% versus last year, attributable to growth in smartphone-related revenue. Full game downloads were $32 million, up 39% year-over-year. Revenue from subscriptions, advertising and other was $48 million, down 17% year-over-year due to nonrecurring items in 2010. The top three digital revenue generators for the quarter were FIFA 11, Battlefield: Bad Company 2 and Dragon Age 2. Notable console DLC contributors included FIFA 11, Battlefield: Bad Company 2 and Mass Effect 2. On a trailing 12-month basis, EA said its digital business was up 35%.

Impact: EA has gotten digital distribution religion. Chief executive John Riccitiello is fond of saying that the publisher’s traditional retail business will very soon account for 40% of total revenue. The larger take-away is that management at EA understands that there are no longer hardware cycles to plan for when in 18 months some new mobile device may get hot and sell millions of units. Game publishing is a much more fluid proposition than 10 years ago, and concentrating on digital delivery helps EA adjust in a much more nimble fashion.

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