Electronic Arts has recently announced their fourth quarter and full-year earnings for the period ending on March 31, 2012. The company has enjoyed quite a successful year, with fourth quarter net income growing from $151 million to $400 million while revenues grew from $1.09 billion to $1.369 billion. The end of the quarter saw EA end with $1.3 billion in cash, down from $1.6 billion last year.
The highlight of the company’s performance over the last year was the continued growth seen in its digital department, which saw a 47% increase. FIFA totaled $108 million in downloads and micro-transactions; Star Wars: The Old Republic currently has 1.3 million active subscribers; and the Origin service has reportedly registered 11 million players, generating approximately $150 million in ten months.
Chief Executive Officer John Riccitiello went on to say:
“We are proud to report a strong quarter and a fiscal year highlighted with $1.2 billion of digital revenue… In the coming year, we break away from the pack, with a very different profile than the traditional game companies and capabilities that none of our new digital competitors can match.”
The successful results have also been connected to the performance of titles like Mass Effect 3, SSX, Kingdoms of Amalur: Reckoning, and FIFA Street 4. Early projections by EA suggest net revenues of $4.08 billion for fiscal 2013. EA is currently trading at $14.48 on NASDAQ, down 4.3% from yesterday.
Analysis: Included in the report is a projection for how Electronic Arts believes they will do in the coming year, and it appears that the company is confident that they will only continue growing. I would have to agree for the moment; sure, I think EA will continue their growth as a company. Despite their business practices that we all love to complain and moan about, they make titles that people want. The Mass Effect 3 ending controversy resulted in a lot of displeased gamers, but the thing is, EA already had the money those gamers had spent on the title. From what I’ve seen of the company, they don’t seem like the group who’s going to be fazed by negative publicity.
The only way I see the complaints actually teaching the company something is if the sequel that will inevitably come out for any successful product nowadays doesn’t perform to expectations. NCAA ’13 is one example where bugs and a lack of support left gamers enraged, but unless this affects the sales of the next title, EA is not going to change.
Although EA’s trading price on NASDAQ has dropped considerably over the last five years, this doesn’t appear to have much effect on the amount of money the company is able to make. For a company to maintain such high revenues and profits in a year where they were voted as America’s worst company is, for the lack of a better word, amazing. Only in our industry could something so bizarre happen.
I don’t have a problem with people purchasing EA titles if they don’t complain about it. But as soon as you begin lamenting about the damage EA is doing to the industry and then turn around to go buy their products, that makes little to no sense to me. I doubt EA is going to make a change in their business practices anytime soon simply because they’ve gotten away with it for far too long. Unless people start to take a stand against what they’re doing, EA will just keep on doing what they’re doing—and why wouldn’t they? Just look at the numbers. It doesn’t appear that anyone has a big enough problem with them where it stops them from paying, which is all that EA is concerned about anyway.