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    Wednesday, July 31, 2019

    Electronic Arts Posts Strong Q2 Results on Apex Legends, Sims 4, FIFA Ultimate Team

    Video game publisher Electronic Arts reported better-than-expected quarterly revenue on Tuesday, riding on the continued success of its battle royale game Apex Legends, sending its shares up as much as 5 percent in extended trading.

    Games publisher Electronic Arts (EA) shared that its Q1 financial results for 2020 exceeded its projected figures during its earnings call on Tuesday. Earning a net revenue of $1.21 billion as compared to $1.14 billion this time last year, EA credited much of the success of its quarter to live services growth of 12%, led by Apex Legends and The Sims 4. Mobile revenue for the company, by contrast, was disappointing.

    Season 2 of Apex Legends, EA’s free to play battle royale game, launched earlier this month. In addition to that potentially bringing in new players, it was also noted that operating costs for the game decreased over the past quarter during the Q&A segment of the earnings call. Looking ahead, EA expects the game to continue to grow. An upcoming esports competition for the game will feature 80 teams from around the world this September, which could attract new players to the game. The publisher also plans to bring Apex Legends to China, which seems encouraging for the game’s growth.

    The Sims 4 contributed massively to the company’s success. The game’s expansion packs and game pack downloads increased 55% from 2018. With a promotion earlier this year in which players could download the game for free, it seems many new players were brought in—to the tune of 7 million, as noted during the Q&A segment during the earnings call.
    Wilson called this year the “biggest year yet of new content” for The Sims 4. This summer’s Island Living expansion pack has been one of the best selling packs of the series so far.

    Looking forward, the company has a positive outlook for the months ahead, as it confirmed new installments are coming to both the Plants VS. Zombies and the Need for Speed franchise. EA will reveal more about its new Need for Speed game at Gamescom next month.
    Though overall financial results for EA were positive this past quarter, mobile was a weak area for the company and down 17% year over year, in part due to the aging of its mobile titles.

    But, Plants VS Zombies 3 is currently in pre-alpha, according to Wilson, which could significantly help EA improve its mobile sales upon its release. The franchise’s past titles have had over a billion downloads worldwide. Later this year, a different Plants VS Zombies shooter is planned for PC and console, as well.
    An outlier in the EA mobile space was Star Wars Galaxy Heroes, which outperformed the company’s expectations. The game had almost 80 million players by the end of Q1.

    EA Sports continues to be a significant sector of sales for EA. Next month will see the release of Madden NFL 20. New features, such as the Superstar X Factor Abilities, are anticipated to appeal to new players. In addition, the upcoming Madden NFL 20 Championship Series esports competition could pull in new interest, and has big name sponsors including Starbucks, Pizza Hut and Snickers.

    Also on the EA Sports front, FIFA had a “very strong” Q1. Esports interest for FIFA is growing, and competitive modes are very popular, according to Wilson. FIFA Ultimate Team 9also had “more than three million players logging in daily during the Team of the Season in-game event,” according to a press release.

    Finally, subscription services brought in more growth for EA, as EA Access came to the PlayStation 4.

    “We believe subscriptions can be transformative to the player experience and the gaming industry over the long term, as they offer tremendous value and choice to players, and greater flexibility in the games we bring to market,” Wilson said.
    The Q2 earnings call for EA is planned for October 29.
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