Managing shift in consumer preference
Electronic Arts (EA) reported impressive fiscal 4Q16 results, driven by digital sales as well as notable sales of games such as Star Wars: Battlefront. Electronic Arts is addressing the shift in consumer preference from packaged games to digital services. This shift is clearly seen in fiscal 4Q16, in which digital revenues accounted for over 70% of total revenues.
EA is working to attract gamers to play online versions of FIFA, Hockey Ultimate Team, and Madden NFL.
Star Wars: Battlefront game extremely successful
Star Wars fans are deeply engaged in the mobile and PC spaces. After its launch in November 2015, Star Wars: Battlefront reached the top five most-downloaded iOS (AAPL) games in over 130 countries. The unit sales of the Battlefront game was expected to be in the range of 10 million–12 million in fiscal 2016. However, this figure touched 14 million units.
Almost 54 million unique players engaged in the EA Sports console titles during fiscal 2016, a 65% increase YoY (year-over-year). EA’s Sims 4 player base grew by 67% YoY, whereas the Battlefield franchise had 9.4 million unique players in fiscal 4Q16 alone.
According to Electronic Arts, players are spending more time with its new games and ongoing franchises on mobile platforms. The user engagement in Star Wars: Galaxy of Heroes is impressive, with users spending an average of nearly two hours a day in 4Q16. Madden NFL Mobile continues its strong performance with engagement increasing by 30% YoY in fiscal 4Q16.
As shown in the above chart, Electronic Arts has an impressive set of games to be launched in fiscal 2017.
EA accounts for 0.5% of the Technology Select Sector SPDR ETF (XLK). The other top holdings of this ETF include Apple (AAPL), with 12.9% weight in the ETF; Microsoft (MSFT), which comprises 9.8% of XLK; and Facebook (FB), which constitutes 6.7% of the ETF.