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What Impacted Electronic Arts’ Revenues in Fiscal 2019?

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Electronic Arts

Last year, Electronic Arts (EA) announced that it would delay the launch of its highly anticipated Battlefield V game to improve users’ experience. The release date was pushed back from August to November. However, management claimed that the release date clashed with the holiday season, which is a time for highly discounted products.

Electronic Arts decided to prioritize a single-user experience over the highly popular Battle Royale mode. As a result, the company struggled to gain momentum. The Battle Royale mode was a fascinating gaming trend last year. Fortnite generated over $2 billion in sales and gave gaming companies a run for their money.

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Electronic Arts is optimistic about the strength of its Battlefield franchise. The company aims to leverage its base of Battlefield fans to try new modes and content through live services. Last month, Electronic Arts launched the Firestorm Battle Royale.

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Mobile gaming

The mobile gaming market is still strong. Newzoo expects the market to grow at a double-digit rate in 2019. However, Electronic Arts expects challenges in this vertical. According to the company, the top 20 mobile gaming titles are all over three years old, which indicates that it’s getting difficult for new titles to gain penetration.

Electronic Arts released its mobile game Command & Conquer: Rivals in the third quarter. The game received a positive response during its soft launch. However, the mobile game hasn’t been able to grow organically since its global release.

Performance in Asia

Asia is one of the key markets for gaming companies. China is the largest market based on sales. Electronic Arts would like to gain penetration and drive sales in this region.

In the last quarter, Electronic Arts’ performance in Asia was lower than the expectations. During the last earnings call, Electronic Arts’ management said, “Given nuances in the Chinese market, our transition of FIFA Online 4 has been slower than anticipated, and FIFA Mobile is still in the early stages after launching in the market.”

Electronic Arts is optimistic about FIFA’s long-term success in this region. The company expects soccer’s increasing popularity to drive sales.

These factors will likely impact Electronic Arts’ sales in fiscal 2019. The company’s sales in fiscal 2019 will likely fall for the first time in several years. Analysts expect Electronic Arts’ sales to fall 7.8% in fiscal 2019 and rise 7.1% in 2020 to $5.12 billion and 5.7% to $5.43 billion in 2021.

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