Video game publisher Electronic Arts (EA) posts higher revenue and profit than expected for the second quarter of its fiscal year.
Non-GAAP net revenue for EA is recorded at $775 million, rising from $495 million for the same quarter last year. The company still expects to close its fiscal year on March 31, 2015 with approximately $4.10 billion in non-GAAP net revenue.
EA is being conservative with its projections for the end of the fiscal year, as per analysts, but it is understandable. The video game industry saw a slump in sales for April and June but is experiencing a boost as the PlayStation 4 and Xbox One start gaining momentum.
Analysts are also affirming that EA has a good lineup for the year, citing Titanfall, FIFA and Ultimate Fighting Championship as remarkable titles and anticipating the launch of Battlefield: Hardline and Dragon Age: Inquisition. However, quality issues are still a concern, referring to NBA Live and Medal of Honor.
The Battlefield: Hardline launch is being delayed from October to early 2015 because EA said it was still improving the game based on feedback and suggestions from the test version. CEO Andrew Wilson adds it is to make the game into a title that players will enjoy for the years to come.
Some of the highlights listed by EA for the quarter include: over 13.6 billion online sessions of games played across platforms translating to close to 2.4 billion hours of gameplay; more than 40 awards received in E3, including Best RPG for Dragon Age: Inquisition and Best Sports Game from E3 Game Critics for NHL 15; monthly active EA mobile players reaching more than 140 million; and being the top publisher for PlayStation 4 and Xbox One for the calendar year to date.
While EA titles remain strong for gaming consoles and PC users, the video game publisher is seeing a spike in mobile device usage, reporting a jump of $120 million in revenues in the platform for the quarter. Thanks to the "freemium" business model where content is made available for free but additional digital goods are offered at a price. With about $105 million of EA's mobile revenue earned from advertising and digital content purchases, this shows that the business model is indeed working for the company.
"We continue to view mobile as a business with tremendous opportunity as the market is experiencing significant global growth in smartphones and tablets," said EA's Chief Financial Officer Blake Jorgensen.
