What you need to know
- Electronic Arts (EA) has reported an earnings and revenue loss for the first quarter of the 2025 fiscal year.
- EA blames the year-over-year losses on lackluster sales of full games and weakened revenue gains for live-service titles.
On a public investor call, Electronic Arts (EA) reported a year-over-year drop of 13.7% in revenue. The company, known for an array of sports games like Madden 2025 and action titles like Respawn's popular battle royale, Apex Legends, blamed the decline on poor performance from live service games and a lack of new releases.
EA's primary income has come from its sports games franchises, with games like Madden NFL, FC, and College Football all experiencing growth in player acquisition and engagement. EA Sports FC Mobile even succeeded at breaking first-quarter net bookings records. "We started our FY25 strong. We beat our net bookings guidance, and we executed across our business as we entertained and connected hundreds of millions of people around the world," said Andrew Wilson, CEO of Electronics Arts, during the call with investors.
Despite a growth in player base across its sports franchises, EA's free-to-play battle royale, Apex Legends, has suffered from significant drops in its player numbers. Still, EA claims the game was still "largely in line with…expectations" and further committed to "evolving and learning" as a strategy to push Apex Legends back toward growth in player numbers and revenue alike.
Wilson also stated that The Sims franchise had seen "healthy engagement" and community excitement in Q1, due in part to the latest expansion, the Lovestruck Pack. An additional 15+ updates were confirmed for the coming year. There was no update on the progress made toward the previously announced The Sims 5, but Wilson did commit to expanding The Sims' universe with new experiences and growing the community with the use of user-generated content.
🔥The hottest trending deals🔥
-
Seagate Xbox Series X|S Expansion Card (2TB) | was
$359.99now $229.99 at Best Buy -
Xbox Game Pass Ultimate (3-months) | was
$49.99now $29.39 at CDKeys -
ASUS ROG Ally (Z1) | was
$499.99now $399.99 at Best Buy -
HP Victus 15.6 Gaming Laptop (Ryzen 5, RTX 4050) | was
$979now $599 at Walmart -
Amazon Fire TV Stick 4K Max + Xbox Wireless Controller + Xbox Game Pass Ultimate (1-month) | was
$119.98now $82.85 at Amazon -
Surface Pro Signature Keyboard (Multiple colors) + Surface Slim Pen 2 | was
$279.99now $112.99 at Best Buy -
Lenovo Yoga 7i 16 (Core i5) | was
$1,139.99now $789.99 at Lenovo -
Samsung Class QE1C QLED TV (85-inch) | was
$2,799.99now $1,229.99 at Samsung -
Razer DeathAdder V3 Wired Gaming Mouse | was
$69.99now $50.99 at Best Buy -
Razer Basilisk V3 Wired Gaming Mouse | was
$69.99now $49.99 at Best Buy -
Lenovo ThinkStation P3 Tiny Workstation (Core i5 vPro) | was
$1,759.00now $879.00 at Lenovo -
Geekom A8 Mini PC (Ryzen 9) | was
$1,099.99now $699.99 at Geekom w/ code WINDA8OFF -
No Man's Sky | was
$59.99now $21.79 at CDKeys (PC, Steam)
According to Zacks.com, EA's full game revenues decreased 43.6% year-over-year, settling at $250 million. Full game download revenue declined 37% year-over-year to $190 million, while revenue from packaged goods dropped 58% to $60 million. These revenues collectively make up 15.1% of EA's total revenue. Live services and other revenue streams decreased 4.8% to $1.41 billion. EA has hinged itself on live services to questionable degrees of success, with this portion of the earnings report making up 84.9% of the company's revenue.
Stuart Canfield, Chief Financial Officer and executive vice president of EA, spoke optimistically of the company's Q1 FY25 results, despite the heavy year-over-year losses. Canfield highlighted that the company was above expectations for content delivered to larger audiences, and the announcement of Dragon Age: The Veilguard's upcoming fall 2024 release had built substantial momentum. EA only released three full game titles in the previous year, which Canfield points to as a cause for the lower earnings. Canfield also shared that EA benefited from a $92 million one-time tax benefit in the previous year and that EA would incur $65 million due to the "February restructuring event" that resulted in the layoffs of 670 employees.
During a question and answer session with investors, Clay Griffin, an analyst for MoffetNathanson LLC, questioned EA leadership about free-to-play business models and whether the strategy had potentially diluted the gaming industry's pricing power or gamer perception of value. Wilson shot down the suggestion with a simple no, before reiterating that the free-to-play strategy had been in play in Asia for more than two decades.
"So as we think about American football, as we think about Apex, as we think about Battlefield, as we think about the Sims, our belief is that if we're building out for a global player base of over 3 billion players, and we're looking to build communities in and around our biggest IP of many hundreds of millions of players, our ability to utilize free-to-play as a mechanism to reach more people on console, PC, and mobile and then offer different monetization opportunities whether that's in small increments, whether that's in Battle Passes or whether that's in full premium purchases, that will likely drive meaningful growth, not just for the industry but for our company," Wilson concluded.
