EA – Q4 2019 Financial Report

eaq419earnings

Yeah, I told you we were going to talk about this. I anticipated a statement regarding Anthem and was curious to see what it was. They did not disappoint. We’ll go through through the other stuff first though.

Should you wish to review any of these materials yourself, it can all be found here. In particular the slides and the prepared remarks. I did not get a chance to listen to the actual live call or the audio of it. Also, I do not currently own any shares of EA so do not have a vested interest in these outcomes outside that of a consumer. It’s all barely informed armchair opinion.

eaq419netplatform

Now, I’m a fan of charts and EA seems to be making pretty and colorful ones. While I was surprised that console was such a huge share of sales, I really shouldn’t be. I am kind of curious why Q4 19 had such a high spike in PC sales vs Q4 18 when the full year numbers stayed comparable. I suppose it could just be a release time-table thing.

Something else I find interesting is that mobile revenue trended down. While one data point does not a trend make, it seems odd considering the crazy strong growth mobile markets have typically shown.

eaq419netcategory

I feel like this is one of those “told ya so” kind of charts. It demonstrates quite clearly why this whole “games as a service” thing isn’t going anywhere. It generates a ton of money. I really wish I could have found a more detailed breakdown of which live services were the primary drivers here. Still, it’s mostly what you would expect. Digital game sales slowly increasing year over year with huge growth for what I can only assume is DLC, in-game purchases, and subscription fees. If I had to hazard a guess, my money is on sports franchise microtransactions follow by Origin Access.

Mobile is still in its own category here and has the same numbers. I had initially wondered if they had lumped some of the mobile in with “live services,” but that does not appear to be the case.

Live services net bookings were up 24% to $845 million, primarily driven by Apex Legends. This delivered the biggest year ever for live services at EA. FIFA and Madden Ultimate Teams both closed the year very strongly.

Or, y’know, I could just read the prepared statements and quote them instead of speculating. I’m not going to quote the entire thing here. I figure if you’re really all that interested you can use the link up top and read through it or listen to the audio version. The two-cent version is that Apex Legends is generating an absolute ton of money and despite its rather sad state of affairs Anthem is still driving growth.

We are similarly committed to the live service for Anthem, and delivering for our community in this new IP over the long-term. The launch of Anthem in Q4 did not meet our expectations. However, we believe in the team at BioWare, and we also believe in what they set out to achieve with this game – building a new IP and melding genres to reach a new audience. Players have spent more than 150 million hours in Anthem since launch, and we’ve heard from them that the beauty and expanse of the world is stunning, and that traversing the environment in the Javelin suits makes for amazing gameplay. However, we’ve also heard feedback from our community about issues that began to manifest as the game reached scale, and that they want more depth and variety in the mission modes of the game. The team is now very focused on continued improvements to the game, and will then bring more content updates and in-game events that will enhance and expand the Anthem experience.

This was the bit I was actually looking for. I was curious where they stood considering the rather poor performance Anthem has demonstrated so far. To say that it didn’t meet their expectations seems to be an understatement and I’m sure if performance continues to be poor their position may well change. Maybe it can pull a Division or No Man’s Sky style redemption. I guess we’ll see.

Think that’s enough business for one day. Y’all take care, and take note of the fact that Grammarly hates the comma in this sentence and tells me to remove it every day.

2 thoughts on “EA – Q4 2019 Financial Report

  1. If there’s one thing to be learned from this, it’s that it’s easy to play with numbers to make some kind of point you wanted to make. I was surprised to see that your net bookings slide showed a comparative increase between Q4 FY 2018 and Q4 FY 2019, while another blog and MassivelyOP were busy crowing about a revenue decline between the very same quarters.

    Tracing back the financial report shows the difference to be another line or two: GAAP-based financial data – change in deferred net revenue for online-enabled games and mobile platform fees.

    I have no idea what deferred net revenue for online-enabled games really means, but in Q4 FY2018 it was negative/a loss, and in Q4 FY2019 it is positive/a gain – and of a sum which changes the entire direction of the trend between ‘19 and ‘18, depending on if you look at net revenue or net bookings.

    And yep, games as a service ain’t going anywhere.

    Liked by 1 person

    1. Yeah, I started to look into that because I thought it was kind of odd but I had other things I needed to get done.

      A quick search gives it as “Deferred revenue is a liability because it refers to revenue that has not been earned and represents products or services that are owed to a customer.” I’m still not super clear on how that applies, but I’m guessing it’s something along the lines of “we sold this stuff on Google Play, but Google hasn’t sent us the check yet?” Hopefully after two to four years of classes some of this stuff will seem less… obtuse.

      Like

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s