Electronic Arts released their financial data for the third quarter of fiscal year 2012, reporting a strong quarter over all that showcased the benefits of the company’s devotion to increasing digital revenues. Among the highlights:
* GAAP net revenue for the quarter was $1.06 billion over losses of $205 million, very close to where they were at a year ago. Due to reduced losses (down from $322 million), operating profits were up; gross profits for the quarter were $509 million, up from $467 million last year.
* Origin was a star for EA, bringing in $100 million in sales revenue. There are 9.3 million registered Origin users, with a peak of 1 million daily active users (DAU).
* Massively multiplayer online game Star Wars: The Old Republic has generated 1.7 million active subscribers and sold through 2 million units in just over one month. EA reports that almost 40% of all copies of SWTOR were purchased via Origin.
* FIFA ’12 and Battlefield 3 have sold through over 10 million units. Madden NFL ’12 has sold 5 million.
* Over a twelve-month period, PopCap’s revenue has grown 30%.
* Mobile gaming accounted for $70 million in net revenue. Consoles accounted for $701 million. The XBox 360 was the top console at $331 million.
* EA claims that it was the lead publisher by segment share in Western markets for 2011, with 17% share in North America and 20% in Europe. It was not stated how this metric was determined.
* EA is expecting their fourth quarter GAAP revenue to be around $1.45 billion. They will be co-publishing Kingdoms of Amalur: Reckoning and Syndicate, and BioWare’s Mass Effect 3 is expected to be a heavy seller. EA Sports will be releasing SSX, Grand Slam Tennis 2, FIFA Street, and Tiger Woods PGA Tour ’13.
The full financial release is at the bottom of this article.
Analysis: Digital, digital, digital. EA is starting to reap the rewards of their focus on digital, including their insistence on Project Ten Dollar in virtually all of their games, their increased casual focus in the mobile and digital space, and Origin taking off.
Origin is particularly interesting. Basically, EA’s proven that even the noisiest gamers will succumb to things they don’t like to play with their pretty trinkets. Origin was literally spyware, but when faced with the choice of either ignoring Origin or not playing Star Wars: The Old Republic, almost 2 million gamers decided to plug their noses and jump in. EA has definitively proven, like Activision before it, that those who make noise on sites like this are the vocal minority. Even among those, most of the ones complaining are full of it. Anti-consumer practices like Origin—who basically hold AAA releases hostage to force market penetration—will continue until trends like this stop.
For the coming quarter, it’s all about Mass Effect 3. EA will continue to spread their influence on PopCap (expect all future PopCap releases to require Origin), and they’ll continue to develop their social foundation via Playfish. However, the biggest driver of revenue for the company will be Mass Effect 3, which is white hot on everyone’s radar. Empirical data indicates that 38 Studios’ Kingdoms of Amalur is looking good, so that could be a slow burner as well.
As an analyst, I’d say EA’s stock, which is trading at this moment at $19.72 and rising, is a good buy. Q3 was impressive, and it’s looking like things will get better as the foundation they’ve laid the past couple of years are starting to bear fruit. As a gamer, that’s likely not good news because EA has proven they don’t care about your complaints, but that won’t change until you all learn to put the disc down and stop buying something you say you hate.