EA Now Makes 40% of its Revenue from “Live Services”

EA’s “live services” revenue represents 40% of its total revenue for the year ended 31 March 2018, with expected growth of 15% in 2019.

EA slide

Most of EA’s live services revenue comes from the various “Ultimate Team” modes in its sports games with FIFA Ultimate Team being the most popular and profitable. Outside of Ultimate Team modes, The Sims 4 is EA’s most successful live service. In a conference call, EA’s CEO Andrew Wilson confirmed that the new Battlefield game will have a significant focus on lives services starting from day one of its release.

Live services revenue also includes subscription revenue from EA Access which is expected to grow significantly in the next year or two. When questioned on the source of this growth, CFO and COO Blake Jorgensen would not get too specific, but he did say we should look out for changes. This will likely include the addition of more third-party titles, although it’s not clear if first-party games will be added to the service closer to their retail release dates.

Live Services revenue is distinct from the digital sale of games which is also increasing year-on-year. Digital sales now represent 39% of total game sales for EA with that percentage expected to increase to around 44% next year.

The shift to live services is so significant that EA will no longer give predictions for unit sales of new games such as Anthem and the next Battlefield. Continued revenue is seen as far more important for the health of a franchise than unit sales, according to CFO and COO Blake Jorgensen.

Wilson also touched briefly on the debate surrounding loot boxes and gambling, stating that he does not believe it will negatively affect live services revenue. Wilson believes that the “card packs” in Ultimate Team modes are not gambling because they provide players with a set number of cards per pack and there is no authorized way to cash out.

Source: EA’s 2018 annual reports and Conference Call of May 8th, 2018. See also EA Presentation.

 

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