Electronic Arts reports net loss for Q2 amid strong digital numbers

| November 1, 2016
Electronic Arts reports net loss for Q2 amid strong digital numbers 1

Today, Electronic Arts published their shareholder reports for Q2 FY17 (the second quarter of the company’s fiscal year, which includes June 2016 through September 2016), reporting an overall loss of $38 million USD. The company also noted that over 60% of quarterly revenue came through digital storefronts.

“Net sales in the quarter were better than expected driven by outperformance in FIFA, and supported by strong year-on-year growth in mobile,” said Electronic Arts CFO Blake Jorgensen, a statement backed up by the company’s published sales numbers. Mobile revenue made up 28% of EA’s digital revenue,  outperforming full game downloads, and falling just behind downloadable content.

Digital purchases — mobile gaming, “full game downloads,” downloadable content, and “Subscriptions, advertising and other” — made up 63% of Electronic Arts’ revenue for the quarter, while regular video games that you could buy in a Walmart or whatever only counted for the remaining 37% quarterly net revenue.

Electronic Arts also predicts that 2016 will be the company’s best year to date, expecting an increase in net profits and cash flow. “We are in an outstanding position for the quarter ahead, with two of the highest-rated games of this console generation in Battlefield 1 and Titanfall 2, global competitive gaming tournaments underway, and our first virtual reality experiences coming soon,” said EA CEO Andrew Wilson.

FIFA also continues to be a strong earner for the company, performing so well post-release that EA has adjusted its expected FY2017 earnings. “We are raising our annual guidance today based on the strength of our holiday slate and FIFA 17’s strong performance to date,” Blake Jorgensen said. Net sales from FIFA — and other EA sports titles — are up 15% from last year. There’s no word about FIFA downloadable content sales in the report, nor revenue from the mobile version of FIFA, but it’s safe to assume the franchise contributed to EA’s strong digital numbers.

Although a $38 million loss sounds like a bad thing, it’s a major improvement over last year’s Q2 earnings, which reported a $140 million loss. The company will likely make up the difference once sales figures from the recently-released Battlefield 1 and Titanfall 2 start coming in. You can find EA’s complete earnings report here.

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