Electronics Arts’ strong second-quarter results show the growing power of new videogame platforms.
“Most of us recognize that the industry has radically changed and the pace of change has altered dramatically,” said Electronic Arts CEO John Riccitiello after the company posted strong earnings for the quarter. “Eighteen months ago there was no iPad. Google was just experimenting with Android.”
The number of gamers is growing at a rapid rate, enabling publishers to turn their titles into “year-round events” by tapping into the capabilities of new platforms like consoles that can connect to the Web, sites like Facebook, cell phones, tablets and other devices.
For example, EA Sports will launch soccer game “FIFA 12” on 12 platforms this year, after a digital version of the game generated on average $56 from players on Facebook alone.
Company will also have year-round gameplay for its tentpoles like the massively multiplayer online game “Star Wars: The Old Republic,” “Battlefield 3,” “Madden NFL 12” and “The Sims.” EA recently launched its Origin digital game distribution business that will incorporate digital gamemaker PopCap Games (“Plants vs. Zombies”), which it purchased for $750 million and could be worth as much as $1.3 billion, depending on how well its games sell.
“We intend to finish this fiscal year a much different company than when we started,” Riccitiello said.
During EA’s first quarter, which ended June 30, the company reported $999 million in revenue, up 23% vs. the year-earlier period. Profits were $221 million, up from $96 million.
Due to an accounting rule, EA must wait six months before realizing revenue from games with online capabilities, meaning that a considerable amount of coin came from titles sold over the holidays.
Without that deferred revenue, EA would have reported a quarterly loss of $123 million compared to last year’s $78 million loss. Revenue would have dipped to $524 million from $539 million.
EA had five of the top 10 paid games on Verizon, two of the top 10 paid games on the iPhone, and two of the top 10 paid games on the iPad in June.
During the quarter, “Portal 2” sold more than 2 million units.