Electronic Arts digital sales soar amid lockdown gaming boom

Electronic Arts Inc (NASDAQ: EA) fourth-quarter results confirmed a strong performance as the video games studio saw digital sales for the year rise above US$4bn amid the coronavirus (COVID-19) lockdown. That marked a 9% increase year-on-year and sees digital sales now make up 78% of total bookings. In the three months ended 31 March, it generated US$1.21bn of digital revenue, up from US$1.06bn a year ago. Physical products brought in US$168mln, versus US$173mln. Total net revenue amounted to US$1.38bn for the quarter, up from US$1.23bn. READ: Video games see worldwide demand surge Fourth-quarter net income jumped to US$418mln, from US$209mln a year ago, and quarterly earnings per share was marked at US$1.43 versus 69 cents. Amidst the stay-at-home gaming boom, EA noted that FIFA 20 has seen 25mln million unique players and Madden NFL achieving “the highest engagement levels in franchise history.” “We’re humbled to see people around the world connecting through our games during this unprecedented period,” said Andrew Wilson. Blake Jorgensen, EA’s COO and CFO, added: “Our results this quarter prove the value of the live services path we’ve been on now for a decade. The breadth and depth of our live services give the flexibility we need at times like this to meet player needs.” EA generated some US$498mln of net cash flow in its fourth quarter, which took the total to US$1.79bn over the financial year. “Stay at home, play together” In the coronavirus lockdown, EA has developed and delivered live service content, whilst its own teams have been working from home. It has also focussed on special community live stream events, giveaways, cross-promotions with celebrities and, via esports, has hosted major online tournaments. Plans for the coming months similarly include more than 100 events and esports tournaments involving celebrities, athletes and charities. Notably, less detail was given in regard to the impact COVID-19 may have had on EA’s more traditional game development and release schedule for new titles. The game developer said that substantially all of its workforce is now working remotely from their homes. Looking ahead, EA noted it is continuing to see heightened levels of engagement and net booking growth to date, though it added the full extent that the pandemic has impacted its business, operations and financial results will depend on “numerous evolving factors that we are not able to predict.” Forecasting for the current financial year, ending 31 March 2021, EA anticipates net revenue of US$5.52bn, driving net income of US$978mln and earnings per share of US$3.35.