EA investing $80 million into next-gen this year
By
Brendan Sinclair, Senior Editor
Publisher puts first bets on coming consoles as digital business brings in $1.2 billion; Star Wars: The Old Republic subscriber base shrinks to 1.3 million.
Electronic Arts is ramping up its investment in the next generation of consoles. The publisher revealed today that for the current fiscal year ending March 31, 2013, it is investing $80 million "in development of games for Gen4 console systems."
EA has already made some next-gen commitments, as CEO John Riccitiello took the stage at Nintendo's last Electronic Entertainment Expo to confirm support for the Wii U, and suggest that Battlefield 3 could find its way to the system. Representatives with the company have also teased a Mass Effect game for the system, but squashed hopes of Crysis 3 for Nintendo's next console. The Wii U is set for release later this year, but both Microsoft and Sony have told gamers not to expect word of their next systems before 2013.
As for its present efforts, EA reported net sales of $4.14 billion for the full year, up from $3.59 billion for the previous fiscal year. The recently completed campaign also saw EA return to profitability, posting a net income of $76 million for the year, compared to a loss of $276 million for the year before. The publisher touted its digital business in particular, saying it brought in $1.2 billion for the year between its downloadable games, subscription fees, add-on content, and mobile and social platforms.
FIFA Soccer 12 did especially well, bringing in $108 million in digital revenues (largely through its FIFA Ultimate Team mode), with another $34 million expected for the current year. The company also has high hopes for Battlefield 3, saying the first-person shooter has generated $61 million in digital revenue, with another $97 million expected in the current fiscal year. Both series posted their best-ever years for digital sales.
EA also updated its Star Wars: The Old Republic subscription numbers, which have dropped off somewhat. In February, EA said the massively multiplayer online role-playing game had 1.7 million subscribers. Today, the publisher put the number at 1.3 million, down about 24 percent. Last month, a BioWare developer claimed The Old Republic wasn't losing subscribers at all, saying only that the peak concurrent user numbers were down.
The digital focus on EA is only going to grow, as the publisher told investors the sector will continue to drive its numbers for the coming year. For the full year ending March 31, 2013, EA expects net revenues to be $4.08 billion, with a loss per share between $0.36 and $0.16.
"In the coming year, we break away from the pack, with a very different profile than the traditional game companies and capabilities that none of our new digital competitors can match," Riccitiello said in a statement.
As for the quarter ended March 31, EA said it posted net revenues of $1.37 billion, up from $1.09 billion. The company's quarterly net income hit $400 million, up year-over-year from $151 million.
In a postearnings conference call, Electronic Arts executives also confirmed that a new Need for Speed game will arrive in the holiday quarter. The game's existence first leaked through UK retailer GAME earlier this year.
By
Brendan Sinclair, Senior Editor
Brendan Sinclair has been a games journalist since 1999. His tastes are eclectic, though he has a definite affinity for games with arcade roots. He's Canadian, but has also been at home in Atlanta, Austin, Chicago, and San Francisco.
170 comments
Wow!! SW:TOR lost 400K subscribers. That's a lot when you only have 1.7 million. I saw a large amount of the SW:TOR Collectors Edition at Fry's Electronics. They just had them all piled up in a stack. I was interested in the game for awhile, but now I think I'll just pass on it.
"In the coming year, we break away from the pack, with a very different profile than the traditional game companies" --- Be scared. Be very scared.. My guess, this is more of an internal memo. Basically, theyre high-fiving themselves for expectations that they will no longer require sharing profits with the traditional retail markets. This so called "Next-Gen investment" is probably money towards digital distribution centers and front end developement for client strategies. Probably has nothing directly to do with games at all. Also, theyre going to be dropping some cash as they court Microsoft and Sony in order to insure the upcoming consoles have a front-end that is going to work in a way that fits their vision. And no doubt, they will hope to gain exclusivity agreements and possibly leveraging some angles to lock out small publishers, as well. Gamestop will have to begin sellng wireless contracts and have more time for this website.
So EA wants everyone to know they just reached into one of their deep pockets and 'invested' that little into a generation of games that'll probably cost even more to develop for than this gen? just looks like a tiny amount for EA, maybe they're not serious about it, reach deeper into those pockets EA.
Brendan Sinclair = EA Fanboy Nr.1Why doesn't EA fire him too - in exchange for a South-East-Asian Sweat Shop Troll?
2 Like What happened to consoles being dead? PC gamers keep saying consoles are dead, then why would EA even bother when they make tons elsewhere?
1 Like @DarkOfKnight We're talking about current generation consoles, seeing as how next gen ones are no where in sight, use your noggin.
2 Like I still wont forgive EA for having a monopoly on the football franchise by owning the NFL license. Competition breeds innovation and success, yet EA effectively robbed that from 2k, then once they did, they jacked their football titles up to $60. Remember when NFL 2k5 was $30 retail value!?
2 Like @Neo_Sarevok I believe that NFL 2K5 was only $19.99 when it released. Still have my copy, I don't even bother to buy Madden games, they're still not as good as 2K.
3 Like @ulgk
they treat their workers as trash as well.
They steal from both consumers and developers.
The EA that the old generation gamers knew, died a long time ago.
2 Like Electronic Arts used to develop their own games, and it was pretty good back in the 90s. Now they are the worst video game company because they value profits more than customer value.
Why do they call them Gen4? According to Wikipedia the current consoles are 7th generation, so next generation should be Gen8 right?
I just don't like this company and its business practices. The sad thing is that EA is extremely important to the gaming world, and this just hurts us gamers and the developers...
1 Like I don't like MMORPG's, bit I like Star Wars and the Star Wars RPG KotOR very much, so I don't know what to feel about ToR losing subscribers. Does it mean that they will move on to other games, perhaps do something a little different from ToR and more like KotOR or will they decide that Star Wars + (MMO)RPG just isn't profitable enough to bother doing?
1 Like I keep reading about digital distribution being the future yet the average broadband connection in the US is only 4Mbps (good luck downloading 10GB-20GB game in reasonable time). Also, digital games are priced the same as their physical disc versions so where are the savings?
Personally, all this talk of a digital-only future is just marketing bull and EA is attempting to present themselves as being ahead of the curve when they're not.
3 Like If anyone haven't seen them yet, then here are all the Tech Demos you can see on graphics, physics and AI for the next generation! I'm showing them Because people aren't excited for the Next-Gen, and I want to show what you'll be getting:
Heads
http://www.youtube.com/watch?v=G9RAk8yfcxI
http://www.youtube.com/watch?v=-TtgW20IEm0
http://www.youtube.com/watch?v=5m0QDLIDJ94
http://www.youtube.com/watch?v=NyoHvNpuaK4
Real World
http://techdeville.com/2012/03/02/fox-engine-shows-off-some-of-its-impressive-lighting-technology/
http://www.youtube.com/watch?v=Yj9XjdPOH-A
http://www.youtube.com/watch?v=XhZG7SjX1Lg
http://www.youtube.com/watch?v=W2eohnOYgms
http://www.youtube.com/watch?v=xe0RoDDzR-o
http://www.youtube.com/watch?v=NuR1wBCw_FU
http://www.youtube.com/watch?v=rckLya4Welk
other: http://www.youtube.com/watch?v=t7Qw05BUuss
http://www.youtube.com/watch?v=pqBSNAOsMDc
http://www.youtube.com/watch?v=HjIzoGnkCZs
http://www.youtube.com/watch?v=0yanP8i0UkY
http://www.youtube.com/watch?v=UluV83tF55Y www.youtube.com/watch?v=sZ5V42zI9Xc
http://www.youtube.com/watch?v=gSOQGazo7Oo
2 Like Sales = $4.14 billion
Income = $76 million
Where did the money go? I know making games are expensive, but come on...
1 Like Most of the money is probably going toward the development of DLC. Nice try, EA, but you can't fool us.
2 Like they're probably using that to come up with yet more ungodly anti-used game schemes. Heck, I won't even bat an eyelash if all those 'Gen4' titles turned out to have day-0 DLCs and $20 online passes.
EA Burn in hell,I piss on John Riccitiello's corpse and s*** on your grave,you ass****.To have companies like EA run some of my favorite games is down right insulting.
5 Like 80 million for development... 100% product development as a result... 5% available to everyone... 95% as DLC and additional purchases
4 Like *opens Gamespot
*sees 6 words : "EA" "$80 Millions" "next-gen"
*goes to comment section to see all the rage and then post this
7 Like Well they're losing money with that horrid excuse for an MMO they published so I'm guessing it's going to be a console only market for the time being seeing as though they're butthurt that PC gamers won't play anything you throw at them like the consolites lol. They'll play anything!
15 Like Dear EA,
We want the hard copy of your games. Digital is not the way of the future. The infrastructure just isn't there.
Love,
Real Video Gamers
1 Like Sorry to disagree...I also would rahter keep my physical copies (for a bunch of reasons that goes from old habits to how great they look on my shelf) but unfortunatelly for another bunch of reasons (from cost to eco friendly) digital distribution in the future.
But I completely understand your dislike...
4 Like I haven't picked up a game in a traditional store in many many years. Trying to think what the last game I bought a hardcopy of. I think it's probably Warhammer Online.
Regarding EA, I find it an extremely conservative and boring company. Even their digital distribution model - Origin - is plain, dull and uninspired, although I have several games on the platform myself. EA doesn't take any chances. They release another copy of FIFA, Madden, Need4Speed, Tiger Woods and so on every year. Bioware which used to be innovative isn't anymore. They're using the same mechanics which made their games so successful 5-10 years, today. EA is stale, dull, boring and unimaginative.
2 Like You summed it up pretty well, and I feel the same way.
Out of all the games EA currently have in development, literally nothing interests me. The last EA published title I bought was Dragon Age: Origins, back in 2009, and I didn't like it very much.
If DICE announced a Mirror's Edge 2, I'd be interested, but other than that...EA isn't even on my game purchasing radar any more.
2 Like There not bleeding customers..Omfg its a mmorpg people..There paid to play..Its different than single player games..Do you guys know what it takes to run a mmorpg to make it continuously keep it growing..Guess you dont..Need to support there dev team..Support there expanding the game..Its 15 bucks a month holy cow..Less than a dollar a day..Its not that much cash..You guys really need to pipe down about the cost of mmorpgs..Perhaps one day it will be free until than ill continue to enjoy star wars..Its one of the better mmorpgs ive played since everquest live..That is saying a lot..Nuff said move along..
During a conference call, EA chief executive John Riccitiello noted that a higher mix of the ?Star Wars? subscriber count is made up of paying subscribers than it was in the previous quarter. He also downplayed the significance of the title somewhat, noting that the company has bigger franchises that are more important to its overall business.
Good Stuff! Get out while you can....
I think SWTOR is a great game but I don't see it's subscriber base growing. You don't need other people when levelling up but as soon as you hit 50 there is very little you can do on your own. The problem is that a lot of people haven't made the social connections to make that work so they will just quit. The end game content was badly paced, you progress past flashpoints (the bulk of the content) being useful as soon as you do operations. There was only one op on day 1 and one added before most people would have progressed to them, both were fairly easy on normal. BW answer to content retention was to release an op that seems to be much to hard with no real progress track to it.
As for 50 PvP, the abject failure of open world PvP has allowed Huttball to choke PvP to death for most of the player base. While changes in 1.2 mean that matches which aren't huttball are now much less of a rarity the gear changes are completely wrong headed. To stamp out high end PvE gear being used in PvP the importance of PvP gear was increased. The problem is that gear is perhaps even more so now the main factor that decides matches. Almost all the PvP gear pre 1.2 which anyone grinded for was rendered instantly obsolete. While since the various improvements to the responsiveness of the combat mechanics the core gameplay of PvP is pretty solid all these issues stack up to be too bitter a cocktail to swallow for most players.
The class story and story telling in general is way ahead of any other MMO on the market. It's easy to dismiss that because that's not what MMOs are about but it does add to the game. The problem is much more resources and thought should have gone into the end game. MMOs live and die not just on box sales but retaining subscribers and as it stands SWTOR will do a great job of that for a couple of months but most players will find nothing for them when they reach the level cap. There will be a hardcore of us that enjoy it so I don't see it going F2P soon but I don't see it building up subscribers unless the lack of end game is addressed astoundingly well and sooner rather than later with a full expansion.
7 Like 80 Million. How is that even a headline? Does that cover the cost to develop and distribute even one triple-A title today?
2 Like dono why you all diss EA so much... no one is forcing you to buy there games or to buy there dlc which you all complain about and makes me laugh that people will call there games without even playing them just cause EA has there name on it...i been playing computer games for about 15 years now and EA games have taken up so much of that play time with all the fifa games i have played over the years. medal of honors in the ps1 days was fun..and now the only two games i really play are fifa12 and battlefield 3 both EA games
@mawilson1983 because we want their games to be good and memorable but EA Refuses to allow necessary needs... BF3 is a mess because of EA, for those that remember BF2 and 2142 we want a BF Franchise we can still be proud of. Instead of VoIP-less, commander-less, 4 person squad fests.
they suck anyways kotor1 and 2 single player where awsome should have stayed that way they dont get my 15$
2 Like Wow 80 Million, Off Suckers Defending Developers and Publishers, Yet Used Games is still hurting their sales? *SMH* Shaking My Head at how GullableGaming Community has become.
3 Like Once again Brendan Sinclair shows EA his undying love and affection.The headline should read: "EA's SWTOR loses 400.000 players since February!" That is disastrous! Also, the $80 million on so-called next-gen is miniscule, compared to EA's gross R&D budget.Check out other articles of Brendan and you will see how he has a track record of writing favorably about EA. I'd be damned, if there is no quid-pro-quo.
@nord1c no, man. Concurrent user numbers are down. LOL. what the hell does that mean, concurrent user numbers. This is biz speak for "we are bleeding customers."
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- Publisher(s): Electronic Arts
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- Genre: Role-Playing
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