Electronic Arts announced solid results for its second quarter ending 9/30/22.  Overall revenue for the second quarter and the trailing twelve months was up 4% over the previous year period.  Live services has represented 73% of revenue over the past 12 months.

Analysis

Electronic Arts’ results are impressive given that they are not releasing many new titles.  The only titles that have been released in the first half of fiscal 2023 are annual versions of FIFA and Madden sports franchises as well as an annual version of F1 racing acquired from Codemasters.  In the last 3 months of 2022, the only titles scheduled are the latest annual NHL and a Need for Speed racing game.

The move to live services, driven by the Ultimate Team service, has been impressive for EA.  The good news is that this is an area that should continue to grow across all sports.  The main challenge for the company is maintaining its leadership position in major sports.  The good news is that outside of Take-Two Interactive not many companies have shown an interest in trying to compete with EA’s major sports franchises.

However, this could start to change.  Next year, EA will have to rename its FIFA soccer/football franchise due to the license expiring with FIFA.  DFC does not expect this to impact sales for the newly named new EA SPORTS FC franchise.  However, it does open the door for potential competition in the world’s best-selling sports video game.  Just something to watch as a long-term issue.

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