EA Returns to Profit in April-June 2010 on HD SW & Digital SW - News
by VGChartz Staff , posted on 03 August 2010 / 3,664 Views
After struggling in previous quarters, EA has returned to profitability in the quarter ending June 2010. On revenues of $815 million (using GAAP accounting), EA profited $96 million for the quarter. During the previous June quarter, EA revenues were $644 million with losses pegged at $234 million.
Even with Madden coming, the September quarter is forecast to be a bit weaker - with GAAP revenues of $600 - $650 million. For the year ending March 2011, EA expects GAAP revenues to reach $3.35 to $3.60 billion with a loss of 70 cents to one dollar per share (the company estimates it has 329 million shares.
EA attributes the change in fortune to increasing digital distribution revenue, and its growing share of the HD software market which is still growing (particularly in Europe where PS3 sells alot of software). During the June 2010 quarter, EA digital revenues reached $176 million - up from $117 million in the previous June quarter. EA expects its digital revenues to increase by 30% or so, to $750 million for the fiscal year ending March 2011. With regards to its HD software performance, EA created the following set of charts.
TTM looks like it denotes "trailing twelve months". EA revenue from HD software has grown to $8.8 billion for the year ending June 2010, up from $7.7 billion in the year ending June 2009. However, in the past year packaged software has shrank for EA, with PS2, DS, PSP shrinking due to the falling overall software markets, and Wii shrinking in the absence of a release as big as EA Sports Active and the slow-down in Tiger Woods. EA attributes much of digital growth to Iphone / IPad for mobile digital, but console and portable digital is growing too.
During the quarter and for previous quarters, EA reported the following revenues by platform. Q3 is the Christmas quarter, while Q2 FY 10 was the Madden quarter, and Q1 FY 10 was the EA Sports Active quarter. Figures are in millions of USA dollars.
|
Q1 |
Q2 |
Q3 |
Q4 |
Q1 |
YOY % |
|||||||||||||
| QUARTERLY NET REVENUE PRESENTATIONS - GAAP AND NON-GAAP | ||||||||||||||||||
| Platform Net Revenue | ||||||||||||||||||
| Xbox 360 | 73 | 171 | 348 | 276 | 262 | 259 | % | |||||||||||
| PLAYSTATION 3 | 121 | 142 | 236 | 272 | 209 | 73 | % | |||||||||||
| Wii | 161 | 142 | 196 | 71 | 40 | (75 | %) | |||||||||||
| PlayStation 2 | 27 | 40 | 44 | 22 | 11 | (59 | %) | |||||||||||
| Total Consoles | 382 | 495 | 824 | 641 | 522 | 37 | % | |||||||||||
| Mobile | 50 | 51 | 56 | 55 | 52 | 4 | % | |||||||||||
| PSP | 38 | 20 | 30 | 37 | 19 | (50 | %) | |||||||||||
| Nintendo DS | 28 | 22 | 63 | 22 | 11 | (61 | %) | |||||||||||
| Total Wireless | 116 | 93 | 149 | 114 | 82 | (29 | %) | |||||||||||
| PC | 124 | 173 | 212 | 178 | 186 | 50 | % | |||||||||||
| Other | 22 | 27 | 58 | 46 | 25 | 14 | % | |||||||||||
| Total GAAP Net Revenue | 644 | 788 | 1,243 | 979 | 815 | 27 | % | |||||||||||
| Xbox 360 | 63 | 189 | 29 | 6 | (121 | ) | ||||||||||||
| PLAYSTATION 3 | (22 | ) | 180 | 49 | (83 | ) | (89 | ) | ||||||||||
| Wii | 23 | (2 | ) | 1 | (31 | ) | (5 | ) | ||||||||||
| PlayStation 2 | (7 | ) | 14 | - | (11 | ) | (5 | ) | ||||||||||
| Mobile | - | (1 | ) | 1 | - | - | ||||||||||||
| PSP | (16 | ) | 19 | 3 | (20 | ) | (1 | ) | ||||||||||
| Nintendo DS | - | - | 12 | (6 | ) | (4 | ) | |||||||||||
| PC | 131 | (40 | ) | 8 | 16 | (51 | ) | |||||||||||
In trailing 12 month periods over the past several quarters, EA's market share by platform was split as follows:
Sony and Microsoft don't breakdown shipments by region for software, but on the Wii, Americas software shipments were 105m from July 2009 to June 2010, and Wii Sports accounted for 11m units of that. My guess is EA is excluding bundles in its calculations. At 94m * 0.12, EA shipped about 11m Wii games to North America, and another 6m or so to Others (209m - 126m for sw - Wii Sports & WSR = 70m. 70m * 0.09 = 6.3m). For PS3, as a rough estimate, if software in North America and Europe reached 80m, and EA had 22% between the two (20% Europe, 24% NA) EA software for PS3 was 17.6m. For the X360, the software market looks like 26% for EA, and is probably 90m overall - or about 23m EA games. To be clear - these figures may also be revenue, rather than units in which case Wii would be higher than it is above for units as PS3 / X360 games bring in more revenue per unit.
EA also lists internal estimates on how "western gaming" is growing. Packaged goods software grew to $19.9 billion in 2009, up from $14.0 billion in 2004 while digital grew from $1.1 billion to $6.8 billion in the same time frame. Used software grew from $600 million to $2.6 billion by EA's estimates. EA also listed several key metrics for its performance, notably where HD software is growing and how many million-sellers the company had on the retail side.
EA broke down its packaged goods segment (games bought at brick and mortar stores) in detail as well.
Given the increases in Europe for EA software on X360 and PS3 it looks like growth in North America was much lower - particularly for X360 in the USA (29% growth in Europe but 12% growth in Europe + USA, with the USA being a much larger Xbox sw market may even imply X360 shrank in the States for EA). With 25% HD market share, EA was likely the biggest publisher for the HD machines in April to June 2010 in the West.
From January to June 2010, EA notes it had 22% share on the HD systems, higher than any publisher. EA also noted:
- In North America and Europe, the high definition console software market is growing strongly with the combined PlayStation(R)3 and Xbox 360(R) segments up 21% calendar year-to-date. The PlayStation 3 software market is up 40% calendar year-to-date.
- EA is the #1 PC publisher, with 33% segment share at retail calendar year-to-date and strong growth in digital downloads of full-game software.
- For the quarter, EA had three of the top 15 selling games in Western markets. 2010 FIFA World Cup South Africa(TM) was #4, Battlefield: Bad Company(TM) 2 was #7 and FIFA 10 was #12.
- At E3, EA won more nominations (15) and awards (four) than any other publisher. Winners included: Need for Speed(TM)Hot Pursuit for Best Racing Game; NBA Jam for Best Sports Game; Star Wars(R) The Old Republic(TM) for Best Role Playing Game; and Rock Band(R) 3 (with MTV/Harmonix) for Best Social Game.
- Madden NFL 11 will debut with GameFlow, an innovation which makes the game more accessible to casual players. GameFlow offers simpler play choices and a quicker path to the action, without compromising the deep playbook that makes Madden so popular with hardcore players.
- In Korea, FIFA Online 2 reached five million registered players, over three million unique players enjoyed the game in July alone and concurrent users peaked at over 200,000. June and July were FIFA Online 2's highest-grossing revenue months ever and it remains a top-three game in Korea.
- EA was the #1 publisher across all platforms on the Apple App Store in the June quarter. EA had nine of the top ten games when the iPhone(TM) 4 launched in June.
Contact Vgchartz at jmazel@vgchartz.com
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The issue is, by the same splits, the X360 total comes to $44 per unit which doesn't really work unless Microsoft has lowered its royalties (in general) or for EA games because they tend to clear certain thresholds.
Well, 4 quarters = 1 year. So July 2009 to June 2010 would be $449m in revenue on Wii games for Wii. Divide that by 17m units and you get $26.40 / Wii game.
That makes more sense to me, as in the USA Wii revenue is split like this:
I pay $50.
$10 goes to the retailer.
$8 goes to Nintendo
$2 for the disc / packaging
Some portion of the $30 goes to licensing and the game development...and so $26 is about right, a little than I would have expected but European pricing and EA Sports Active would elevate the amount EA gets per unit.
@The Source: It's probably shipped units what they are talking about in that graph. Take for example Wii sales for the last FY, total revenue adds up to 570 million, if you divide that by the 17 million games you estimated, then it gives an average of ~34$/game which sounds about right.
?? Selling profitable games makes you profitable - the PS3 / X360 market is big enough for EA to sell more profitable games
But only Wii can make EA profitable!
EA has given specific figures about revenue for each platform
http://www.gonintendo.com/viewstory.php?id=132239
