EA - Earnings call transcript Q2 2018

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Operator

Good afternoon. My name is Jennifer, and I will be your conference operator today. At this time, I would like to welcome everyone to the Electronic Arts Second Quarter 2018 Earnings Call. Thank you. Mr. of you President conference. begin Vice Evenden, Investor may Relations, your Chris

Chris Evenden

Andrew and you, second note release on available With are EA's Welcome that the at our fiscal today Thank and to are call. our quarter SEC Jennifer. our CFO. Jorgensen, Blake our XXXX filings earnings call ir.ea.com. Wilson, Please CEO, earnings me

In our prepared addition, remarks. we have posted earnings slides to accompany

conference transcript. we audio financial conference London call, Tuesday, Monday, the at will regards a replay model Tuesday, Suisse Credit in this after prepared speaking an XX; in post November calendar, Lastly, remarks, in on our Scottsdale November our of call, and be X. NASDAQ on Blake on December With to and our XX; the conference San will Francisco UBS the the

and fiscal Thursday, is of XXXX This differ expectations. We as XXXX, the future our call XX, duty financial to XXXX. from update today. of events cause future today, them. results you our and the our Actual earnings include QX events scheduled comments performance January and Our for company. forward-looking materially could regarding that differ statements may most results discussion these XX-Q XX, any for to risks makes statements from Arts October actual those recent Electronic and materially discussed disclaims a Form of refer to presentation

made basis. against comparisons exception stated. in the are flow, During period prior All presented the this with a the of unless free the cash this GAAP metrics, otherwise same financial call, will be course the on year call in of

a part review their our bookings. to net our the ordinary course SEC We This as name sales of have of with the came filings. in up discussion metric net recent of periodic operating changed

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turn call Andrew. over to Now I'll the

Andrew P. Wilson

innovative platforms ongoing continued was services Excellent for were growth more above choice, The continually play. our and experiences more to deliver our is way wrapped with guidance, for Capturing for These major through growth want areas. at games, our and Chris. EA's for highlighted technologies. event-driven across and accessed today and platforms by impact more strong year-to-date. models experiences, EA in industry. on focus and key more EA these the new around is accelerating lead opportunities content digital EA's fun to across Revenue are drivers world. reflected live that of entertainment the more our second continuing Arts. that uniquely quarter players of looking in Electronic QX growth in the powered they earnings the by core creating services, position launches are fiscal strong transformation growth these for SPORTS execution to all industry. evolve and interactive Thanks, It and a business our our the titles results extraordinary Players content this momentum strategy, digital the the

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over to Blake. call the hand I'll Now

Blake J. Jorgensen

expect $XXX operating we were loss this we reported was reported results our of our loss purchases the second at quarter, year flow contrast, notable Operating I'll was last report EA's $X.XX, performance timing share and our downloadable ago operating our revenue than cash a quarter, year. ago $XX was cash our Thanks, loss, share dependable on digital of non-GAAP million that relevant million. from In cash million and our Remember financial $XX strong Operating Capital we guidance, of been this $XXX services. rules shares. a for growth our year's. down tabs Ultimate regarding our our classify to above Andrew. of shares. XXX $XX marketing million $XX In our our measured business of trailing associated of the titles. our $X.XXX strongest discuss months better a $XXX flow of than To titles, growth million business. million of to was measure of please FASB last driven model. in results sports diluted million which flow. comp given and of expenditures in flow our end GAAP Note guidance. from would million, count a stock-based decrease to through the how was use million. We're second measures, saw profit, year pleased collections. cash was expenses live quarter's strong sports Had the our the treatment million, of compare our results million, by phasing a the to net share refer the by quarter for and operating to affects with ever the compared a share basis, the above resulted historically lower GAAP net driven in $X.XX guidance to to results our million a a shift in XXX dynamics that operational we compared million for $XX were added $X count The were loss resulting a XX then digital particular, performance an the $XX have have by GAAP the per bookings million the changed billion, and $XX investment. $XXX in event-driven the quarter Team free

earnings comparisons for a flow are basis. all slides like-for-like made these However, See information. on further our cash

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short-term quarter Our balance $X.X investments with cash this end at held of onshore. of were the the XX% and billion,

net million up business the Now our primarily but year XX% drivers XX $XX quarter. resulting prior ago $X.XXX on up in compared X period driven of prior services, this mobile I'd Digital year in quarter. million represent offset record Sims NFL XX% Battlefield XX by net our a on of for trailing Performance Team. to Ultimate the live program, like quarter second on by the were the The bookings billion, were quarter. the improved guidance last and of guidance. a bookings Team main million year-ago Digital game Exchange The turn bookings downloads. the XX-month by new $XX basis, a million, $XX business $XXX compared to and Ultimate of and is the above effect year. X, Net were Madden was for our and over months, XX% key hedging to full the drivers net the rates our the to this now increase headwind FX our have of over tailwind

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bookings Team in X in Madden FIFA net to year-on-year million. Online This service FIFA Ultimate X. in was X, XX% driven The by Sims First, and growth live $XXX increase strong and Asia and up Battlefield were

physical, sales ago. XX% quarter, weeks of X days the FIFA months. on three see One were Xbox NFL game record XX% Wars Origin a year XX% points PC $XXX million, EA rapid Madden driven but last Madden year, bookings digital about delivered it Madden the before The In from addition, Star Mobile. compares unit was Heroes our from Battlefield X% This our and bookings million, to drove year-on-year. primarily Access trailing X. digital, over continue to year-on-year net period based digital in downloads console the the up PlayStation end comparable was and Full last higher XX%. measured a XX to Mobile services $XXX of and the net was net first This XX% to and also Access by XX-month Galaxy FIFA X rather of Growth to sales, and of just high. also the launched than XX a growth. new on just increased sales percentage bookings and of of XX% up than portion of generated QX XX.

Turning to guidance.

revenue full expectations year GAAP $X.XXX Our billion. remains for

raising $X.XX. We're to year $X.X the our cash we're $X.XXX earnings guidance guidance our share operating from to per full billion. raising flow However, for billion

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live live share for quarter. the cost be we new is existing be basic quarter, to This with be year-on-year by billion. existing million results share third $XXX $X.XXX million of expenses anticipate This for of using of due the new calculated year-on-year in to net diluted loss of of count and investment growth different billion, million. launches. up primarily OpEx to we net is to $XXX the in will $X.XX the Note quarter per report continued that XXX XXX services. the and be For million. this and offset and X% used. of is services share in bookings a count down profit, revenue We in genres expect third Should effect product revenue a $X the operating

slate new XXXX new further II. Looking live across addition to services, of services, live and our priorities to the our our other our models integration ahead, the including like be continue in titles of our genres in Star a titles, many esports our subscription expansion the such of action, growth business continue business live as deliver of their business growth sports from business. to of is mobile and new fiscal services profitable The Battlefront associated full core Wars plus

with the add genre and the game Battlefield We will next moved into action Anthem.

expect subscriber to experiences to looking players for deeper and We values. higher titles grow continue new production our mobile from benefit with our base to

services, our services, less bookings delivered annual than remember a to half continue start sports live be XX% of the fiscal remaining total months. XX of As bedrock models, and bookings XXXX a recurring the including mobile over our our you titles. our build your the that our to bookings, through us Including live last of services net sale net Live business. of next frontline calculation in quarter our sales were event-driven takes of nearly to titles of catalog the over leaving

XXXX, In sports dependable We revenues particularly on in progress and FIFA conclusion, live Ultimate once again addition, performance. in XX% titles fiscal excited a it XXXX XX% stable World driving seeing shown In soccer drive that. which is ahead their already the sure value success strongly. year's the have globe. Russia, tracking by delivering in we're and are We're Cup around have fiscal in our Team growth interest esports and making the to next our are will well forecast services the growing impact to we and we're of in given

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Now I'll Andrew. back turn the to call

Andrew P. Wilson

of people more global envision a connected the billion more reach worldwide. a global XXX in engages Today players play. than network we that million we future, Blake. community Thanks, In than X

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Now I Blake your will take questions. and

Operator

Sachs. our with Chris comes Merwin from Goldman And question first

Christopher D. Merwin

Thank couple. just had great. you. a right, All I

to Wars can bit I just the any about X which I And year over mechanics the maybe think then of Battlefront, since year-on-year more still downloads, feedback for got that out you think from points time? monetization right the of the little inflection think shift been feel Do called in process? What digital you. a that excess changes any per year-on-year, a in points if shift Star like is sort maybe went? the secondly, in-game digital I was way talk has to Thank beta? for revenue. about reaching that downloads? you you during And how beta So you've long-term community type made Madden FIFA guidance in hoping X for of changes mix we're for console And you and

Blake J. Jorgensen

strength in in such is this very Star as and particular, I'll markets more pleased at it many some piece. digital mature the Madden. surprised digital download downloads, FIFA of for piece, the and FIFA, since I'll of then address not where the both Chris, in Hey, bit Andrew do the game Blake. sold We a were Wars markets. and have strong global is digital it's as is a

attribute did, track the it's to Team, continued we everyone the with digital-only So some Ultimate packages, great as which as the movement look digital, we involvement promotions see number driving and year. think that last it's is of conservative. special And conservative X% XXX% towards digital. digital some again that did well to Overall, see this adoption. continuing And on year. that's to I we're It look the to

where that be So to are up starting we not digital. a that signals pace. that certainly us, consumers And meeting in slowing might our pick point we're inflection just to

where going. we're very about So it's optimistic

continue in business the see business. you clearly And the push at we do year-over-year. to can gross differences look we'll digital to You that can margin as everything our

Andrew P. Wilson

the Battlefront stable of of the infrastructure So very the betas beta this most Feedback and marketplace game into on is one again, been added and will really on. which put robustness feedback assets a that we had. was on why Star reason to run II, Wars and core the size that the the marketplace systems of we've robust And beta The we've gameplay very strong. probably was in positive. and very the put the have test betas from magnitude

player across the think going conversation having the that. players as really in at that that boxes, engaging Wars we our is Star single is not about conversations a with basis conversation, more the There one global with the we Battlefront two gameplay graphical specific II are And very that on player community. quality, a but conversation, the There's launched on there. around we've engaged industry the players course daily around feedback on overall everything was which since then, loot positive. When assets One a in world also a many ecosystem pays ongoing digital a II Star we a the $XX that nearly and a look we in value. the times gated is content the about we of about be where been the Season game, at say, years? Pass, offer behind for that's Wars of think much for would've free. with and comes Battlefront value game three will the And that we game. take last there community value, is start As of We size and very, looked for that we've we to what

adjustments world importantly, with in, pay But ongoing process? as come, very for things progression very drive be we value this you things the the a will and who they And that what are feel also and the the for make we years you ongoing to what manage do us. beta, very through continue the believe a been digital a that's together, which focus feel games be while what to on on And it's opportunity playing that to good size, balance And continues, that the in the an Pass the their live and all from to there for DICE progression free second digital participate only need important economy. the be to event-driven When that through will the that can gated continue many around earn offer in the players services player comes previously behind based of good daily the does important on three which adjustments with in come right a of individual by community you that and we they focuses fact are it down come as DICE got the where is think about we've balance the players it is, we ecosystem to fairness our can can to gameplay win? the making built conversation, digital earn, can to Then times keeping a which can seen it's comes buy, about over ecosystem years experience to the everything and So extend about And users, feedback very many community think together. Season how overall really and would almost dialogue event-driven years service community. is community player proposition the kind enhance many for the earn down expect inside an games, we base great, way earned game. that game we we'll our will the games. this, progress is have to more everything core for through that And And and choice keeping elements is players focused game. we game, what that the have key to an for event-driven that to we built is builds player live multi-player and in a live And with we've many opportunity are in post-launch about players years. the around that service now this. we benchmark game

And that. months we about our weeks, coming so with we'll as good we move community years. stay feel the through very connected And and

Christopher D. Merwin

Okay, you. great. Thank

Chris Evenden

Next question?

Operator

from Nowak question Brian comes with Your Stanley. Morgan next

Brian Nowak

on portfolio think biggest players payer secondly, Thanks two. for Madden. kind taking around live across of like bring to or to overcome? you players state penetration my was points on start Visceral Appreciate number in do and I are Madden, what of you kind of curious went now? Team Team as more the the what Ultimate of increases Games? kind right what about that in And FIFA have on just need still friction questions. hurdles commentary And and or paying. the hear I And to of commentary worked of any has the the Ultimate around action comments creation

Blake J. Jorgensen

Team Team. again. and this people and the is Madden Team, player one And base single in to been This as but one, Andrew play how big as be that the the both a Ultimate drivers believe continued bringing in who to people more all then money Visceral. the that been Ultimate the then Team right. Team realize bringing play well people well Blake, Madden. Ultimate year in on and I'll as Ultimate and some to found And All the fun, address to And is has them number grow. as it's last year continued of can game. prevalent Ultimate to to this Ultimate Team sports that's introducing continues most into the spending and and of grow we start people the to we play year how single game actually in starting added overall, FIFA were player in flow FIFA to driver of lot across

is fun tournament, year as Team and at their in Ultimate or playing the has in And design as and events Team esports of in we well and Ultimate other for practice think person, better the more our drive who the are continue fact all what remember and we're business online in to and the that's interested is esports esports better and the those people. I run, events plus that and live more that, thing and we that build everyone as to an around well. more getting each drive either allowed it us to business, helped esports has build to bring

Andrew P. Wilson

in through to such of game it And evolution does in as close it terms of shifts tracking come seriously clear the time, their a time spend very that for deliver tough experience closely from take a of to play time creative on, they wanted design. the time testing what a with So the players, we seeing during we've on a fundamental in and and the the enjoy needed we development decision that players became game very, wanted are the to back part that before that and process happen that we marketplace. that to content feedback listening pivot and how And really us long an been to it's with we marketplace a and to we the the process. very to of you they and working were working decision. make lot something again, anytime Visceral, studio, But

the be versus that in players. it about content do service have as looking to gameplay heard strongly single where of will or we're about development happy created with believe better live You Star assets that fan of It and service, about at a or the a was with Wars you line and was this needed have for Star how versus we get single around about. single-player player Wars it and very still also live we II in point part future. very a experience Battlefront We're that a how expectations and excited as utilize in may conversation. can we'll right this heard that conversation was to the game some was IP, just the be overall wasn't wasn't multiplayer more game player player We

Chris Evenden

Next question.

Operator

question with - Thanks. (USA) next comes Your Okay. Stephen Securities Ju Suisse Suisse. Credit from Credit LLC Ju Stephen

The how Simpsons your older So, your I as think games cross-currents games business longer newer like growing Blake, really like you but talked Heroes the rapidly no the are Galaxy previously of are. about and mobile in

that row, overall now shift also on of shrinking terms of than terms update And Andrew, plans less has must the total for talk the new mobile you the what us you about can which Sims? mix revenue It the new? XX% quarter where contribution. makes are version me a the old be Thank and games The launch in the and in are seems like in between mobile of of you. second the can growth for think that older of So your accelerated we

Blake J. Jorgensen

about the Yeah, I'll and to the addition time for coming and mobile us that spring. in Sims The Sims exciting Andrew part Clearly, the talk and the some is get we'll so The see first business let piece. an then I'll

We also working have we're some unannounced those. titles so that you'll and on see

is long our the think some few our they different and for those other over to think business longer. slowed, titles is, if the key of next drive have not growth of business have do things, just I will mobile the our around reality of than I still some profitable. time to some for console great The a and be PC people us. we because industry business, business like in drive of titles just A but mean, I all yes older from years, those the stayed drag help the couple the

doesn't this people drive to anything market. in zero we So some do We simply profitable change. up try seen to so simply do try the way don't And that's on to line profitability. growth shareholders. that's we mobile like with not build going around hold unprofitable to something an for the of a marketing not profitability. high And we're expenses, standards model, invest we've business the around top That in going

Sims. continue so talk path And the down The growth. We're about have excited products got that. very to coming let us future. steady about you'll the great in We've see I'll Andrew

Andrew P. Wilson

It genre the valuable launch on Sims of the in still of kind core The and adjustments matter. receiving a game a as a well engagement game terms unchallenged and brand soft for really and it's is very as is that very for well. both are game profile essentially feedback The going Sims incorporating And on in platform over monetizes time. So we're in variable us, in how are a the IP. any valuable which we

And launch we want it so, we uptick kind still expect strength good Sims we The mobile. make news us, well The which in on seeing the that of the brand, for us strong sure need, we have very with FreePlay for really and we to spring. doing it that given of Sims and is community the our to metrics the get we're And in right

Blake J. Jorgensen

all a mentioned We're a more, that growth quarter. couple X Sims, The very be as the just you can as text, or Sims on to prepared since in The is And Sims continue the franchise Sims The Sims I and performed console, or well extra X in we're And mobile. bodes content that and how very both out with about all, the quarter. be has think excited overall for PC, version pleased and PC this Sims I'll from major in later throw of times, console, will The just that we're the in see the we driver one the console hear X

Chris Evenden

Next question?

Operator

question Ryan from Barclays. with comes Your next Gee

Ryan Gee

for questions. Hi. Yes. Thanks my taking

to titles? in by you mobile. games a considered driven And going mobile you the one then, to it's is The first potential advertising Have see contributor and nice for that that if is this quarter, could on revenues The your the glad today, forward? that's in guys about that or meaningful saw purchases. sports opportunity help any in-app and The it business a think that pickup whether your us is mobile positive of you Sims other quantify or acceleration

Andrew P. Wilson

Yeah.

Ryan Gee

with is sounds game doing the guidance. full services then as on apparent Blake guidance. live for digital sports some then better margins much ahead certainly and is benefiting you that And of is said, question It I'm revenue sure second business downloads like mobile that the the accelerating, going not tracking your the really forward, as strong mix should outlook, and you in see guys really

that is this margin So it about keep sort makes Wars unique going a that specific fiscal XQ Thanks. of but in gross Star is to quarter, headwind year we should deleverage for margin sense op there that's mind? anything any next or drive

Blake J. Jorgensen

business. And other other good advertising for we of different doing outside million. been do. a what principle, We've games a many game operate of on mobile. is under advertising We long our some is That $XXX on in own a that advertising first not games. simple will is mobile time, It which companies mobile do so years. Okay, than number total our

network to games. goal Our of mobile is keep people inside our

that to be just advertising to advertising, do not minimizes going we some games us. dollars our It do going marketing inside But costs. do we're to if our do game simply other and outside steer for to so network, people mobile And that's games. would mobile we

Facebook, that mobile advertising advertising look and some versus of they still out in, maybe anonymously it's anonymous games lot fairly ways. in continuing very that. is biggest very advertising There opportunities have can about it a is see We have at strong we're right grow challenge play intent don't the Google where that CPMs But games do you build the level. some we and at information We're a But at low that base a to of now structured consumer. might on we or data to that. most a people thinking

is One look to things the people years. On back just to last the five of guidance, at. encourage look couple I and a go over

I think last different in our over QX, out don't had year, conservative of how we've those QX. of quarter the time. given any our been guidance And always coming periods fairly we've of think largest going into behavior I we've guidance on

any I don't messaging so And think there's whatsoever.

operated we what component on more revenue finely a listening better the on phone $X.XX on year. of the to bottom line by have of think quarter, start getting to a and because historically I more a we to million QX powerful the raise a consistent much how much the line. pretty is the we're think the revenue you And for view it's phase we the us and guys tell $XX back And on doing of predict split – models signals I the QX, I top have I between we've positive your raising guidance with challenge every live our think and half large We and our our ability little little people. on and closer you services.

better probably time. we're at so going And our be to guidance over

keep to there just challenge I'd you. that So

Next question.

Operator

Merrill Post is Your with Lynch. from next Justin question

Justin Post

Thanks.

puts one one for I Blake. takes go big about revenues? World your and the QX, in is two maybe next you one for X% Battlefield. had know And through and medium expectations First, versus year. last Andrew, the you titles this year, maybe big decline year. can on Cup then obviously one Battlefront Talk

World Thank you. about You've maybe a launch and FIFA. capture services Are And event? incremental around the you dollars that as Cup? users live you will thinking how

Blake J. Jorgensen

Yeah, Justin.

a last me, of was QX smash and Battlefield Battlefront, we I think know us most huge success X people a had year excuse that. because for that or

Titanfall, had also which while didn't still sold it We well. very original our meet expectation,

in just obviously for only Guiding down strength seeing $X billion X live We're and a across with fact is X% last to is the positive. a service that the Wars out have while still II Need quarter. year-on-year strength are over the QX and on Star I see monetize. big a be X year, we huge comp console, obviously Speed And And board of services Battlefront And Battlefield that We don't sense that year. will find can't so people how think able better the people The unknowns. excited we'll continue we grow. it's it, or with against the huge of the part console, It's Battlefield bookings last strength net X the But you about us. just for to to talk. Battlefront live know quarter when of Sims and X yet give that there. sells. some We'll very of We'll QX to II next need But well Sims that's unknown. how

as the as unknowns last versus year scale well are mix differences. probably those the the in So

Andrew P. Wilson

announce fans, celebrating Cup, have World any World a to but SPORTS, EA World really now, it Cup have we news the back XXXX. stretching we life On to for to and long right Cup don't tradition the of bringing

gets world's it on sporting announce So closer, continue as details the how more we'll tradition. event, this largest we'll

Justin Post

Okay. you. Thank

Operator

is Eric question from next Your UBS. with Sheridan

Eric J. Sheridan

the I the before, understand, One, two. you Thanks to back a of want going little wanted between there a in understand type holidays. a bit tipping seen about of dollars one. number the just packaged guys. mobile for monetization, years? you might December normally growth coming last question, understand bit marketing shift mobile think commentary in allocating bit marketing where the some over in-game of couple seasonality penetration on And Thanks you how how the of user ROI the more the quarter, That's versus think back gifting Do business? maybe sometimes little point driving packaged to taking just frame spend to mix with back you of I number goods we've the then around we've to mix the business, digital the to goods through two, little digital a from around see to power seen the

Blake J. Jorgensen

the mix address mobile and Andrew address I'll Eric, can packaged the piece. So then

things skew a we see, is the But we going we I skew not think know more addresses It's It wanted. It's breadth may the of as give more. People players more interests that first heavily not Battlefront, battles. physical. II the towards Star to in quite of the So the traditional want holidays than where to of on it. game. someone. more shooter and the Many Wars some got Battlefront strong this always skewed space first-person hardcore were do because typically the of while packaged obviously or played Battlefront as audience mix, Christmas got there's much, gift the to hardcore that that have the

were is that So up helps lot so know that know skew were we a audience the don't little our bit, we bring see a both there a certain playing beta, that but slight might and that do We for people of sense the we skew. yet. could in hardcore a younger see

difference big haven't number, a help the hope that but guidance, in skew is assumed We is, our could little margins our in ultimately quarter. a bit the

Andrew P. Wilson

ensure, of that maintain that finely Blake are drive mobile to that earlier, in level the got teams talked our profitably. is business business continue appropriate to of believe constantly and terms mobile a about we tuned we've model profitability very for marketing, updating So the we as

attract profitability approach and so right in the to about most our people will in the of some monetize spending a ongoing where in with a around who do. world we we're is programmatic done people when of work a acquisition. digital We And than that's on done think But mind, metric cohort ultimately trying and more conservative drive it, profitability. marketplace

and marketplace. some than to over of short-term, value better model And believe drive titles. of do time people lifetime span medium-term it's operates our because profitable Our a simply long-term we growth we the balanced that overall shorter portfolio in

Blake J. Jorgensen

we're I that long game build remember engagement. trying mobile and think has to deep the a is to thing other

the beast the that Wars: a much we the really with Galaxy core people almost to time keep new few play Heroes, versus users the in play are are loop day. people a model feed we you put could And period the If long more and weeks. over a a engaging that have play the that people built These it's at long every game engaged. every for which around into game model you games to the all of they key time. that events driven look of That's know Star time to by

Eric J. Sheridan

so Thanks much.

Operator

from is Piper with question next Olson Your Jaffray. Mike

Mike J. Olson

I afternoon. good had Hey, two questions.

but hate many that you're I down, First, you fiscal to willing second... units think, pin XX Blake, would how to was Is the share in be I II Star million, then number? you XXXX? still for Battlefront previous And Wars assuming

Blake J. Jorgensen

Go ahead.

Sorry.

Mike J. Olson

No, ahead. go

Blake J. Jorgensen

going answer your was if a want. then say, I'll even let it. to I just you question, to and ask or next you let And me question say try third

well. and because things. to of to on So a surprised at between a Obviously, of a we're the we've finding a all giving unit. less it's difference units And size We're the people year as day been live start units. once the obviously and year about becoming unit of meaningful less digital at service growth on there's guidance the are units end digital the physical help the us,

place. built our And is change guidance put annual that any in II, any that unit so assume game, into for changes including or Battlefront our we've quarterly guidance in

on revenue And unit so not focus and the guidance. guidance

let So until next hear me it. I let now I'll stay ask your And quiet you question.

Mike J. Olson

right. All

good. Sounds

that others business streaming games a didn't coming most maybe mix, on are So from other you're opportunities long-term the have you've Or had of like significant impact the a lot mention. Thanks. digital on? there growth continued some of content. subscription, cloud. areas success download those there's that focused in Which the years, But drivers full-game could of I add-on are with

Blake J. Jorgensen

are of content us. working all important We're say the above. the would to piece. I of extra those all Clearly, actively on

important be exciting for Andrew to and on mentioned, likely some a the subscription opportunity in things you'll great plus our models Access live It thinking lot why amount subscriptions our time, there. And streaming, services, that in work EA many development few the very most additional up And into of games over Andrew likely other we us. consumer at ultimately that of kind of doing more critical, world games years well. may down important the to games you'll platforms. can as there's been can plays reasonable and other technology that that's we both enjoy spent how talked It's And Wars, years. very on of time his out in to service the service way. the working in out. Wars in the games. that's live question-and-answer obviously we'll we're you on trying wants is component play and Subscription them And of put to about Battlefront. those games. Access. we're and Origin for there. lot environment. live how imagine believe our You then on those operate a like And a and imagine because But We've very a driving a Star on to that come few consumers model call more lot still. an or in And we as how build a But go see can see And Star over that, road way would most last very where, of see spending you are coming see numbers things we've together that around that's content time a that a price. And

well to those want. that on evolve to But But for to possible. that's investors of the we're profitable what we extremely think And the delivers that. possible consistent game over as we and best repeatable more in business do on this that the as we consumer. and business our general. as and model as bodes industry So time We be very all services the think base how all come I have today, plus together, focused think

Andrew P. Wilson

about think a about little addition we think one this. just drivers, And long-term there we as as extra context

in thinking of have the very and greatest been before, say media may disruptions years plus streaming the about has are seriously five that. heard last consumption we me that the You of combination in subscription, the of entertainment one

that live subscription they doing service who the value unlike total level subscription, one the services player thing media, is and You're the globally when linear of infrastructure seeing also but as they Because you've we enjoy that's would about lost need facilitate the not have players, offerings, community committed, a inside we play to around in the often us might subscription fee work in work our of games in technology this heard do that games. a conversation expend games not the the really about that the subscription. subscription at of onboarding live what of and subscription we're the And connected us paid a is only play the a services. participate talk large is around

at have And scale it to so we the some that to, years believe take in it long to way we while the kind that may term, expect evolve us facilitate of a of evolved, same movies digital for of the is industry and born value music uncapped entertainment digital the by inside interactive that the are virtue live upside that subscription. of services

Mike J. Olson

Thanks a lot.

Chris Evenden

Next question.

Operator

question Tim next comes Your Jefferies. with from O'Shea

Timothy O'Shea

Hi. you taking questions. Yes. for Thank my

So a looking users, very at FIFA XXX big number. Mobile, million

going if on of live as support discuss Just for one to there's finally, I quick any And you we that to share just to wondering Battlefront become then stands can a roughly triple unit in would the the much you revenue how game marketing? think mobile follow-up should where should second, expect then a the boost whether can to guidance? that could for plan monetization? real get true And a timeline of the discuss – just today talk embedded And well? you what's movie marketing? just drive Mike's wondering question, Whether in around any services terms what you FIFA's Thanks. plan of Just is Blake, contributor? if you sales. console, size Battlefront game Madden. it's on in wondering then launch it could discount from II? when terms hold conceivably Would And And the forward

Andrew P. Wilson

a was there. There lot Okay.

try start. me and Let

of Madden one heard So in had season, XX current reality us current with couple we third Madden we before that mobile. in you that and prepared that respect is, I starts spent you the days in from users, its strength. iteration to XXX time deal But to What on even false the in was on on a FIFA number top how strength that in think is continues a a from started franchise great go think of its remarks NFL, season of first do Mobile, number Madden. the had with also. the through of The about QX, to is iteration, it's million

starting has to even entertain this in FIFA in that West construct for platform mechanic the world. and And year, and second a So to for And and we long understand season. to football around followed and take soccer the or global of that on for it other us. this again believe launched Madden believe the we're And committed players is weeks we nuances play mobile, when to or in truly community that a Football last the was the in very, very This given similar strong. than this to will soccer though remember term. might any we opportunity think the we biggest sometime is and how it a a knew sport more Madden, launch, players exist a really we mobile. are truly world. support its global similar as East, on globally, that we to FIFA, you a community is that going Mobile long-term about tune. that design the the few

we We in expect become seasons popular same still way profitably global has completely are a us, and that getting it less we if that it the but see us Madden, will soccer not in any because grow year, fine monetization basis. is would for coming the three even on it took growing with

Blake J. Jorgensen

mobile not triple to I and a is game the what truly say the And I But forecast you it a have would is fast. a fast to as where there. as continuing to may but China, going like never is growing PC think free-to-play size, we and point soccer grow not very market places once give growing in console I'm is was, global on where

could market And be So Xx current for FIFA between that much FIFA says Southeast on a the on console, a online us. mobile Asia Japan mobile be market on current in plus our China and Madden. there's huge and scenario would larger hope Korea, is than that FIFA

Andrew P. Wilson

It to do terms the part reason license Disney around and absolutely a is way the have this II, of just That's great The for that, like to compressed in we marketing Star positive movie major have hope IP build do marketing noticed timeline. a for Last And are answer same trailer in for seeing seeing really, first game. we may Battlefront from movie So you the strong we're Jedi. the the and released more yes. why a had really feedback. that get benefit They build is the What anticipation a of title the Wars. on we're anticipation

Blake J. Jorgensen

it discounts all doesn't have you on guys will That Friday of games discount don't that stores right pay make to pocket. most choose so Friday. we likely just write for. clear And mean so you let might see really Black not on on now that game own some right their not about out at the Black Friday to before me you out Friday bring Black We discounting, anything Black have

always selective discount has time most maybe That's discounts you'll We holidays, around the the game we will Christmas. business like see the and even around the either games launch, some movie Thanksgiving worked. the way last or did likely

the don't other that's games that sell discount, the that you see in the the fact And than into on so if way anything read you holidays. title

get not II. just break of I going quarter fourth the service, the can't it quarter. of in forecast, because Partially live would live the the drive to for quarter, but Battlefront say terms out it In and the actual events the the into quarter will in out start coming I large it's we'll really

fiscal the sense So can quarter. end that position the until we at you really it's end forecast. of not in the we'll won't But quarter be how probably of third have or really doing or keep a and tail quarter the going. of how a fourth of tail it's it large the well large forecast a component good But it's the

Timothy O'Shea

Thank you.

Chris Evenden

question. Next

Operator

Laura from comes Needham. with question next Your Martin

Laura Martin

Hi, okay? me there. hear you Can

Blake J. Jorgensen

Yes.

Chris Evenden

Yes.

Laura Martin

Super. Okay.

you on historically sales, about what lengths. the FIFA well marketing I'm decades had been have engagement impact we then for wondering, Is I'm about guys or you give that And than secondly, us curious So expected. Cup, game and And shift, update? has lower World in marketing should well? our is as the quarter two timing be we player not your was U.S. could when the down taking next a your spending

Blake J. Jorgensen

piece, marketing timing all The shift. it's

in marketing, all talked I think marketing marketing a during doing different types quarter. of we last broader the We're year. about and

it's less so time. concentrated And around launch

marketing overall, brought down. think I our we spend

years, the seen it's that year. You've to assume the be down back going in few board but across don't the over half last the of that

is might be of most it of some So phasing, so. it but not spent,

Andrew P. Wilson

but feel again, are kids for them. In I Cup, feel been terms my Australian, American long I've so time a and I'm of World here disappointed. American. we're the I

Although, makes Cup. I really might say World Australia the

see it for with it's So The by Cup or that is, Of their love the really, And world world's World event, XX team where football depending they I've World followed is years. national FIFA, teams soccer their even largest people what lived is come players. stop particular, don't But it dream the about And most their we is and all who the around players and does in from U.S. people on enjoyment watching Spain team the sporting just reality heighten multicultural a and call there. the the from. they is if think now played participating? are as as also non-American not we are you course. a we UK., country, very and because the Cup are about most played think

don't expect kids a won't we for U.S. So there, me, but huge disappointed impact that for my the and be I'm there.

Laura Martin

up. follow one Maybe you. Thank

Chris Evenden

Sure.

Laura Martin

Sorry.

players. elevate stream? more money So lets onboard that and getting large people of by committed the intrigued your bringing that a driver made biggest mind you're from the saying that or plus value players you uncapped statement really And the of in was revenue you number community subscription, is curious, it's is streaming I'm new disruption because onboarding I fans, super saying the an

Andrew P. Wilson

is it not virtue users and of quality Those see in proposition. see doing too those users. and the of they get media, also games for they high who two thing the low, coming low, we in look our a value this we really may to because our it, games it are enticing there's mad fact value existing is do What subscription you out we've is so power because the the because user participating do you'd of that friction before be this seen do games, gamers types friction as opportunity the that capped. do the linear to the the We of played traditional subscriptions just is of of same power never value context play by In the is of games at our subscriptions: and not have see that in subscription inside the subscriptions is is we that

who as subscription into And drive cases, those XX% I subscription think the before. live in games. never services of the of played players in of many top live see games also and We the cases, revenue play They additional come also players, multiple power on games than service value. more they've who played participate incremental

invest we think this looking we great about The time categories and capturing basis, a both those their everything actually who friction of the the about really without of mentioned. that we actually to power that who's think access value in go-forward entertainment amount user provide. user you play And a to looking it and of just is so, on casual as kind

Laura Martin

Thanks. helpful. Very you. Thank

Chris Evenden

right. All

Next question.

Operator

from Partners. comes question MKM next Your Eric Handler with

Eric O. Handler

Thanks Yes. for very question. much the

it out coming a us percentage then could services to if little your bit a curious the plays given of I you're wondered range on out year period? little a versus how give come know console, of out give is for that game, And give if of content vary competitive us by if the for dollars? $XX add-on that Just secondly, titles range a have but a in the live Battlefield you X perspective that revenue two-year the a gameplay all for in going over you could you sort of what And spring? could could

Blake J. Jorgensen

so they're In a different some by XXX%. one region because the world. $XX titles, titles, capabilities So hit to first spend some uplift going that. be varies the to around really let of dramatically In me have or or quick. geography of you'd the also off core, XX% really XX% have you plus XXX% It XX% It varies.

keeps the just Team end So it's events kind at of it's people hard to of the back. spectrum that we're engaging Ultimate and pare high so is it running Obviously, so many coming it because down.

if and they about make as really, generalize. the we've it's how some something that way to got yes, Andrew we'll they'll So spend the And keep we then really want probably love. I'll along sure let money question. we we engaged in and one to more it's it players. think hard one really people touch engaging do engaged, But do second deeply quickly they're

Andrew P. Wilson

really, in And far and feedback the multiplayer integrating category year. this And and is we're more infantry has focused strong again games one comes probably the be So, for It's have shooter feedback the from was really great things off last on been that new currently But closed to unique and the and a so going it's as vehicle multiplayer great community announcements progresses. it community for lot talk we're foundation. in talked Incursions. will Battlefield that don't and X industry combat. first-person we have in is in it the both alpha it five-on-five about will fact into we've Battlefield, a player positive, Battlefield game. of the small-scale game about any far our And battle. the year greatest so a the contained

we're excited about So very opportunity. the

Blake J. Jorgensen

So can one last go question, trick-or-treating. so I

Operator

with And Hickey our final question comes from Benchmark. Mike

Mike Hickey

congrats Andrew, quarter. it. Blake Hey, and on Appreciate your

Blake J. Jorgensen

Thanks.

Andrew P. Wilson

Thanks, Mike.

Mike Hickey

I Just, digital your question, up. the revenue an was on accounting but gasp at asking sales, Blake, FIFA recognition you

of recognition into the that QX. delayed that you year, last think I year? Is this somewhere

Blake J. Jorgensen

formally Yeah, I mean, delay it. don't we

have actual few first end our with that's a end a quarter, before just and days off that's way the the the the work of cut of digital parties. we We

three most for two or were of the FIFA FIFA bulk pre-ordered or they be purchased almost will and of the are a who revenue title because in in for Access. QX. QX. Ultimate people digital EA all both days early so the Team The either would And But digital purchases come revenue digitally digital in regular

Mike Hickey

me, retail Who introducing pretty game looks by picking One your be sales it. delicate working But partners at inflecting. follow-up have some it's plan GameStop or here to for partners, progression your the it more is at thank be seems Got least. against least to compete I used. new Good. on know like physical up subscription you. a clearly speed. you knows. to to to But Maybe hard digital

new And how the to a some is anything manage sales, disruptive you. your of for curious year. be curious, all, sales just can despite you could maybe thoughts So on digital if product there's the catalyst maybe feels that and maybe can that at of in Curious of to response? last over be if also ordering promotions reactive which over holiday, like some do saw we you that, to promotions game

Blake J. Jorgensen

create even don't problems don't could create to the GameStop's despite very retail full, retailers. been which would we do mean, We with we I to into really around have I out We've there all we about I we're to world. that digital, channel the yet. how still business, we've on of physical obviously, it comment be lot our relative can't have always our Yeah. we're important or we their But ultimately about fact the smaller it's for a retailers. want discounting details ship way. want that great think relationships program. new overly partners financial of talked cautious an and the part intentions

indicating, all Most do that go were digital So months that we'll pretty term. can flyers regions short promotional those have we in can be think newspapers, our And and to watched term We promos fast of always six be and long-term in locked necessarily time. is lot things are countries. you or again prepared. beauty The that into with closely of you've one-day be do year. reactive. careful retailers of special you for certain point-of-sale of do plans digital, XX a We with I ahead long as do sales. can't We can materials, a you've up this because can got got to we've

the retailers those And carefully with so advance well we in set on and those. very work up

Blake J. Jorgensen

appreciate on Thank you that, I'll in their Halloween you. everyone quits call time. it this to January. and I We'll So talk coming late can the with so enjoy call everyone

Andrew P. Wilson

Cheers.

Operator

for disconnect. This conclude you your you does conference participation. and Thank today's now may call

Chris Evenden	Electronic Arts, Inc.
Andrew P. Wilson	Electronic Arts, Inc.
Blake J. Jorgensen	Electronic Arts, Inc.
Christopher D. Merwin	Goldman Sachs & Co. LLC
Brian Nowak	Morgan Stanley & Co. LLC
Stephen Ju	Credit Suisse Securities (NYSE:USA) LLC
Ryan Gee	Barclays Capital, Inc.
Justin Post	Bank of America Merrill Lynch
Eric J. Sheridan	UBS Securities LLC
Mike J. Olson	Piper Jaffray & Co.
Timothy O'Shea	Jefferies LLC
Laura Martin	Needham & Co. LLC
Eric O. Handler	MKM Partners LLC
Mike Hickey	The Benchmark Co. LLC

Electronic Arts (EA) 31 Oct 172018 Q2 Earnings call transcript