Last month, the chorus of vuvuzelas fell silent in South Africa as Spain claimed its first World Cup, but the droning echoes of the instruments have carried over into Electronic Arts' first quarter financial results. The publisher today reported boosted revenue for the three months ended June 30, citing 2010 FIFA World Cup South Africa, Bad Company 2, and FIFA 10 as its best-performing games for the period, with all three selling more than 1 million copies to gamers.
Total revenues for the quarter reached $815 million, up from $644 million for last year's first quarter, with net income of $96 million. Both of those figures exceeded the publisher's previous projections. While sales in EA's distribution business were down, packaged goods publishing jumped from $462 million to $586 million, with digital revenues ramping up to $176 million from $117 million.
With digital offerings responsible for nearly 22 percent of the publisher's revenues, Electronic Arts CEO John Riccitiello singled them out as "driving the business." Bad Company 2 and iPad titles like Scrabble received particular praise, with EA's increased presence in social gaming also playing a part. Last year, Electronic Arts boosted its digital business with the acquisition of Playfish, maker of microtransaction-driven online games like Pet Society, Restaurant City, and Country Story.
In a post-earnings conference call, Riccitiello said EA estimated the physical gaming business in the west was down 5 percent year-to-date, with a 9 percent drop in North America partially offset by flat sales of games in Europe. He cited the Wii and particularly the music game category as being responsible for much of the downturn but stressed that EA has "limited exposure" to those businesses without mentioning the EA-distributed Rock Band by name. On the other hand, sales of PlayStation 3 games have been particularly strong, with EA saying software sales for Sony's console were up 40 percent year-over-year in the west, and 50 percent in Europe alone.
For the second fiscal quarter (three months ending September 30), EA expects to post $600-$650 million in sales, with a net loss of $262-$295 million. Both those numbers are smaller than its previous year's second quarter, when sales tallied $788 million and losses amounted to $391 million. The publisher also reiterated its full-year expectations of between $3.35 billion and $3.60 billion in revenues, although it now expects losses to range from $.70 to $1 per share, instead of the $0.85 to $1.15 range previously issued.