Release Date: October 29, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Electronic Arts Inc (EA, Financial) exceeded its Q2 net bookings expectations, reaching $2.08 billion, a 14% increase year-over-year.
- The launch of College Football 25 was highly successful, contributing significantly to the growth of EA's American football ecosystem.
- EA Sports FC continues to thrive, with a 130% increase in global player reach, enhancing engagement and monetization.
- The Sims franchise saw a 6% year-over-year increase in weekly active users, driven by new player experiences and content.
- EA raised its full-year guidance for FY '25, reflecting strong performance and confidence in future growth.
Negative Points
- Apex Legends' net bookings fell short of expectations due to lower engagement and changes in the Battle Pass structure.
- Despite strong performance in sports franchises, EA's non-sports live services growth is expected to be less robust.
- Operating expenses increased by 10% year-over-year, driven by restructuring costs and increased personnel expenses.
- The company faces challenges in maintaining growth for Apex Legends, requiring significant innovation and systematic changes.
- There is uncertainty regarding the long-term success of new initiatives like the EA Sports app, which requires careful rollout and partnership management.
Q & A Highlights
Q: How does EA plan to sustain the momentum in American football, particularly with college football, and what are the plans for the EA Sports app?
A: Andrew Wilson, CEO, explained that EA is shifting from annual product launches to creating a year-round football fan platform. The strategy involves integrating real-world events and community-driven moments to engage fans continuously. For the EA Sports app, EA aims to connect video games with sports data and live sports, leveraging partnerships like La Liga to enhance the fan experience.
Q: Can you break down the live services growth expectations for sports versus non-sports?
A: Stuart Canfield, CFO, stated that live services are expected to grow mid-single digits in the second half of the year, driven by sports franchises like College and NFL football, and EA Sports FC. The growth will be more pronounced in sports, with less emphasis on non-sports or entertainment.
Q: How is EA addressing the challenges with Apex Legends, and what are the plans for future seasons?
A: Stuart Canfield noted that EA is focusing on innovation and systemic changes to enhance player engagement and retention. The company is committed to delivering new experiences and has adjusted its guidance to reflect current engagement levels. Andrew Wilson added that EA is investing in both seasonal content and significant systematic innovation to maintain and grow Apex's player base.
Q: What is the strategy for Apex Legends' future development, and is there a possibility of an Apex 2.0?
A: Andrew Wilson emphasized that EA aims to innovate within the existing Apex ecosystem without forcing players to choose between past investments and new content. The focus is on enhancing the core experience and introducing new engagement opportunities without separating the experience.
Q: What factors contribute to the potential breakout success of Dragon Age: The Veilguard?
A: Andrew Wilson highlighted that Dragon Age: The Veilguard has strong potential due to its high-quality storytelling, rich world, and compelling characters. The game benefits from BioWare's return to its strengths and a market with limited competition in this genre.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
