EA Q4 2014 Financials: Digital's Great, Mobile Is Wonderful

EA Q4 2014 Financials: Digital's Great, Mobile Is Wonderful

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130 million customers can't be wrong, especially not when they bring $500 million to the table.

EA's coming to the end of a stellar fiscal 2014 with $4.02 billion in non-GAAP revenue for the year, exceeding forecasts by a significant margin. Around 40% of games on both new consoles, EA claims, come from its stables, and it has six more on the way, including a new Frostbite 3 game that may, or may not, be a new IP. EA's saying nothing about that one until E3. But, says EA, digital is where the money is: about 45% of its total revenue, or $1.8 billion in non-GAAP, came from digital sales, exceeding guidance by nearly $100 million.

Where did that digital cash come from? A lot of it came from extra content and PC free-to-play, but mobile's the real winner, with revenue up 21% over the previous year. EA now has something in the region of 130 million mobile customers, worth $500 million to its bottom line, and EA Mobile Studios is already preparing "exciting new experiences from our major brands this year," according to CEO Andrew Wilson.

Here's something to make you think about the future: $111 million of EA's digital revenue came from smartphone and tablet games, while $112 million came from full game downloads. In other words, you folks out there who digitally bought into Titanfall and the like contributed about as much to EA's bottom line as the ones who bought Simpsons: Tapped Out doughnuts.

Speaking of the future, EA expects great things from the next financial year. Digital should generate $2.1 billion, with mobile revenue increasing by at least 20% over 2014, and EA expects more than 50% of its total earnings to come from digital. Of course, that's if it meets expectations. If it exceeds them again, Wilson and his colleagues will be over the digital moon.

Source: Seeking Alpha

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This made me depressed.
Turns out those farmville clones are making cash hand over foot.
EA gets to live thanks to mindless consumers.

Well we failed as gamers. I'll start handing out swords. Everyone pair of for Seppuku.

So, at this rate EA is about to declare Triple A gaming dead and that they're going to make nothing but downloadable mobile games?

If nothing else, it would be interesting to see Tapplefield and Titanswipe announced...

EA's mobile success means that Firemonkeys Studios is doing well.

Firemonkeys Studios doing well is great for the Australian game industry.

This is great news in my book.

IceStar100:
Well we failed as gamers. I'll start handing out swords. Everyone pair of for Seppuku.

This has nothing to with us as 'gamers,' and everything to do with those middle aged sad acts and toddlers you see on the train, their face buried in a round of Candy Crush or something else, wasting a fortune fifty cents at a time.

I'm beginning to think that free to play games and micro transactions in general need to start falling under gambling laws or at the very least gaining some kind of regulation. They're becoming the slot machines of the digital age and people are pissing vast amounts of money into them without noticing.

Considering the absolute shit that EA puts on mobile, this just makes me depressed.

Whilst part of me is dismayed by the fact that EA's business practices are being validated, at least they can now stop with the 'poor, persecuted EA' routine. It would probably be too much to ask for the number crunchers at EA to look for the meaning behind their statistics, rather than just the bottom line.

Karloff:
130 million customers can't be wrong, especially not when they bring $500 million to the table.

I beg to differ. Those 130 million people can still be very wrong, depending on where this is going in the future ...

EA likes to post a lot of numbers, but they never provide any useful analysis on them.

130 million customers can't be wrong, especially not when they bring $500 million to the table.

So EA is generating $3.84 of revenue per customer. Keep in mind that revenue is not profit.

EA's coming to the end of a stellar fiscal 2014 with $4.02 billion in non-GAAP revenue for the year

Non-GAAP numbers being worthless since they do not follow a standard which allows comparison between other companies. They could be including billions of pre-orders in that number, which under GAAP, would be logged as "unearned income" and would be carried as a liability, not an asset.

Around 40% of games on both new consoles, EA claims, come from its stables,

I'll have to run some in-depth numbers later, but EA hasn't exactly been forthcoming with sales figures.

...and it has six more on the way, including a new Frostbite 3 game that may, or may not, be a new IP.

Completely irrelevant to quarterly financial statement.

The rest of the article talks about future expectations (good for stockholders, worthless for financial analysis) and non-GAAP income (again, worthless for financial analysis).

I'll see if I can't find their GAAP figures later (as well as some units sold comparisons).

in my opinion EA should just disappear from the face of the earth, they simply bring the entire gaming industry down with their destruction of classic franchises, the killing of studios they buy and of course their insane anti-customers policies, i hate them more than any other company in this industry

So the entirety of EA's mobile division could just about break even on Destiny =D

Article should be renamed to:

EA Pleads to Shareholders, "Please don't jump ship, we're not sinking - the sea is simply rising!"

MinionJoe:
EA likes to post a lot of numbers, but they never provide any useful analysis on them.

130 million customers can't be wrong, especially not when they bring $500 million to the table.

So EA is generating $3.84 of revenue per customer. Keep in mind that revenue is not profit.

EA's coming to the end of a stellar fiscal 2014 with $4.02 billion in non-GAAP revenue for the year

Non-GAAP numbers being worthless since they do not follow a standard which allows comparison between other companies. They could be including billions of pre-orders in that number, which under GAAP, would be logged as "unearned income" and would be carried as a liability, not an asset.

Around 40% of games on both new consoles, EA claims, come from its stables,

I'll have to run some in-depth numbers later, but EA hasn't exactly been forthcoming with sales figures.

...and it has six more on the way, including a new Frostbite 3 game that may, or may not, be a new IP.

Completely irrelevant to quarterly financial statement.

The rest of the article talks about future expectations (good for stockholders, worthless for financial analysis) and non-GAAP income (again, worthless for financial analysis).

I'll see if I can't find their GAAP figures later (as well as some units sold comparisons).

EA's GAAP numbers $8 million profit for the financial year ending 31st March 2014.

http://files.shareholder.com/downloads/ERTS/2912432202x0x751528/37a9910f-c608-4589-975e-d79d0e3af8e5/Q4_FY14_Earnings_Release.pdf

This is the state of AAA 3rd party companies if they follow EA's lead. Crappy, shoddily coded, incomplete, and broken games sold to consoles while pushing more "F2P" model type transactions to force you to have an even decent experience maybe.

And to think, people want Nintendo to become this.

"EA's coming to the end of a stellar fiscal 2014 with $4.02 billion in non-GAAP revenue for the year"
How can fiscal 2014 be over when the year is barely 5 months old?
Don't you mean 2013, or are you from the future? In which case, please bring more interesting news back from 2015 next time ;)

Kenjitsuka:
"EA's coming to the end of a stellar fiscal 2014 with $4.02 billion in non-GAAP revenue for the year"
How can fiscal 2014 be over when the year is barely 5 months old?
Don't you mean 2013, or are you from the future? In which case, please bring more interesting news back from 2015 next time ;)

It's all dependent upon how they set up their accounting system and their financial year start. Financial year is not the same as calendar year for businesses. So if EA does have the Q4 2014 financial be the end of April, that means their 2014 financial year started May 2013. Things would be a lot easier though if the financial years were the same as calendar years, but alas that's not the case.

It's all very meta, in a way.

EA makes games that encourage you to buy more turns so you can keep tapping away at the same buttons over and over again;

The audience for same gives EA money to encourage them to keep tapping the "mobile free-to-play" button over and over again.

I find this really interesting. So, even with the blockbuster named Titanfall they only made 8 millions of profit for 2014.

PS: Between 500 millions non-GAAP in one quarter and 8 GAAP in one year, their is a big difference and i would like to see article of this kind taking account of this difference before writing sentence like "130 million customers can't be wrong, especially not when they bring $500 million to the table", because it's biased and false. Yes it mean doing some research but it's called "journalism".
Thank for your attention.

I'm honestly not surprised by this, people after all have been known to spend their money how they want and when they want, this just proves that notion.

But then again who am I to tell someone how to spend their money, I am after all just one person with no such authority and command, other people on here however...

My decision to cease patronizing EA once they went 100% Origin is affirmed.

My prediction: Star Wars: Battlegrounds will be online-only and feature microtransactions. Pay-to-Jedi.

238U

 

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