EA’s mobile gaming and digital revenue
Electronic Arts (EA) and Activision (ATVI) aim to build robust gaming portfolios to drive user engagement and revenue growth. The two gaming firms need to focus on content updates and live services to increase the average time per user played and attract new players.
In fiscal 4Q17, monthly active users for EA’s Sims 4 rose 33% YoY (year-over-year) driven by gaming updates and an introduction of fan-requested features. EA’s Madden NFL Mobile was one of the top games on Apple’s (AAPL) iOS for the third season.
Although EA’s mobile revenue rose 1.2% YoY in fiscal 4Q17, the firm expects revenue from this segment to rise between 5% and 10% in fiscal 2018.
Digital revenue accounted for over 60% of EA’s non-GAAP (generally accepted accounting principles) revenue in fiscal 4Q17. In the quarter ended March 2017, digital revenue for the firm rose 24% YoY, driven by console sales of Xbox One (MSFT) the PlayStation 4 (SNE).
Activision’s digital revenue in 2016
In fiscal 2016, Activision’s digital revenue was $4.9 billion, or a rise of 94% YoY from its revenue of $2.5 billion in fiscal 2015. Similarly, its digital revenue in 1Q17 also rose significantly to $1.4 billion—a rise of 50% YoY. Its digital revenue now accounts for over 80% of Activision’s total revenues (at the end of 1Q17), compared with 74% of total revenues in 2016 and 53% in 2015.
According to gaming research firm Newzoo, 2.2 billion gamers are expected to generate $108.9 billion in revenues during 2017—a rise of 7.8% YoY—whereas digital revenues are estimated to account for 87% of this market (or $94.4 billion in revenue).
Activision’s digital revenues rose 94.0% YoY (year-over-year) to $4.9 billion in fiscal 2016, up from $2.5 billion in fiscal 2015. Its digital revenues rose 50.0% YoY in 1Q17 to ~$1.4 billion.