EA / Titanfall
Shortly after the launch of its new blockbuster videogame Titanfall in March, the share price of Electronic Arts crossed the $30 mark for the first time in more than five years. It still hasn’t recovered from its near-vertical tumble during the 2008 financial crisis, before which it was regularly trading above $50 a share, but it’s something.
When EA reports its fourth-quarter 2014 earnings later today, though, the big question is whether that something is enough of a thing. Was the buzz around new console hardware, and its first games for that hardware, enough to put EA firmly on the path to stability?
We know this much so far: Titanfall sold well where it was supposed to, in stores like Walmart, taking the No. 1 spot in NPD’s March charts for U.S. retail game sales. But retail software is a shrinking hill, contracting 27 percent between March 2013 and 2014, to $406 million. And that’s not a new trend:
Here’s a look at how EA’s packaged and digital net revenues have fared in the same time frame, based on the past six years of its Q4 earnings reports:
That digital overtake last year was driven by growth both in mobile games like The Simpsons: Tapped Out and console games with microtransactions baked in, like the then-current soccer title FIFA 13. However, Titanfall developer Respawn Entertainment pointedly declined to include microtransactions in its game, but will have some paid downloadable content starting this month.
One thing not to expect in today’s earnings: Revenue from the Xbox 360 version of Titanfall, which was released shortly after the close of Q4, on April 8 in the U.S. and April 11 in the E.U. That’s significant because industry-wide software sales for the previous console generation have shrunk faster than expected, but the 360 still has a much larger install base than the Xbox One, so it’s possible the game will get a second wind this quarter.
EA also released another shooter, Plants vs. Zombies: Garden Warfare, in Q4, which tackles digital monetization differently, with free downloadable content, but paid microtransactions.
Like Titanfall, Garden Warfare was exclusive to the Xbox and Windows platforms. The company has released
two five cross-platform titles — Battlefield 4, FIFA 14, Madden NFL 25, Need for Speed Rivals and NBA Live 14 — but no exclusives for the PlayStation 4, which has taken an early lead in this generation of hardware sales, with seven million units sold through to consumers worldwide versus the Xbox One’s five million sold into stores.
It’s hard to fault EA for that bet, though. Sony’s previous console, the PlayStation 3, stumbled out of the gate and trailed on U.S. retail shelves behind Microsoft’s last, the Xbox 360, for 32 consecutive months.
Also potentially on tap for today: Some official confirmation of and details about EA’s expected deal with Comcast to sell and stream videogames through the cable giant’s X1 cable boxes.
Analysts are expecting earnings per share of 11 cents and quarterly revenue of $812 million, a 22 percent decline from last year’s 1.04 billion in Q4.
Correction: An earlier version of this story incorrectly said EA had released two games, not five, for the PS4.