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A Look at Digital Revenue Growth for Electronic Arts

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Digital revenue rose 28% in fiscal 1Q18

We have seen how important Live Services is to Electronic Arts (EA). Over the last few quarters, gaming companies such as EA, Activision (ATVI), and Take-Two Interactive (TTWO) have relied on growth in digital revenues to drive revenues. Activision acquired King Digital, a major player in the online gaming market, in 2016.

EA’s digital sales in fiscal 1Q18 rose 28% YoY (year-over-year) to $681 million from $568 million in fiscal 1Q17, primarily driven by strength in its Live Services and Mobile businesses. Digital sales now account for 63% of total revenues in fiscal 1Q18 compared to 56% in fiscal 1Q17.

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Take-Two Interactive’s digital revenues rose 56% YoY to $368.2 million in fiscal 1Q18, up from $172 million in fiscal 1Q17. Growth in recurring revenues from microtransactions, virtual currency, and downloadable add-on content impacted digital revenues for the company in fiscal 1Q18. Take-Two’s digital revenues were driven by growth in Grand Theft Auto Online, Grand Theft Auto V, WWE SuperCard, NBA 2K17, and WWE 2K17.

As seen in the chart above, digital revenues from the PC & Other segment rose 23% YoY in fiscal 1Q18, and its Mobile revenues rose 6% YoY. Revenues from consoles such as Xbox (MSFT) and PlayStation (SNE) rose 25% YoY in fiscal 1Q18.

Worldwide digital revenues could touch $13 billion by 2019

According to a research report by consulting company PricewaterhouseCoopers, the global distribution of digital games is expected to reach $12.9 billion in 2019, and it should account for 19.6% of the industry’s overall gaming revenues.

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