EA - Earnings call transcript Q4 2018

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Operator

Good afternoon. My name is Erica, and I will be your conference operator today. At this time, I would like to welcome everyone to the Electronic Arts Q4 2018 earnings call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. you. Thank Mr. of may VP Relations, Investor Evenden, begin. you Chris

Chris Evenden

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

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

and transcript, an and and call, could XXXX future we for most updated for recent to our actual financial will any We today, audio disclaims differ remarks, replay include Actual of This from materially XXXX. the company. as the and statements prepared our that expectations. XX-Q differ May calendar, of July and our them. duty after Arts Thursday, With from Lastly, financial model, discussed earnings Q&A. our performance of X, update risks refer forward-looking our a cause the an accounting our to events scheduled XXXX, regard comments call, of to today. results this may regarding post statements XX, presentation Electronic you those call to makes results is fiscal QX these materially discussion events a our future

the I'll with made the in Andrew. turn in period During And flow, this call metrics, course a that, stated. unless comparisons same All call, year over of the free the against the cash of to are on exception with basis. financial the will be otherwise GAAP this call prior presented

Andrew P. Wilson

subscriptions, where grew global in continued learning stronger. base, our communities. Electronic on transformation and from of year putting We expanded and our games, players Thanks, focus engagement and Arts first was growth even Chris. a to XXXX and grew leading services, year a commitment continued live listening for our our player our and FY

are and given our earnings year Our well growth in XXXX fiscal above January, revenue for and continued in were positioned FY we QX guidance for XXXX. the and

wrapped a Our an with strategy deliver is and new to expanding content ways reach collection amazing innovative global audience. games in services and of to

a Here year the of just our completed. in are few achievements

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We are our all platforms. growing reach across

date players to across years launch. Our XX has consoles Battlefield to fans than favorite PC, more games million life as ecosystem current-generation titles continue for after their and play of Battlefield

Sims Our and platforms, XXXX. more FY generations PC Sims mobile active in million across with players than XX community and spans across

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and depth and Our to more entertain a basis, communities portfolio more global FY our continue we daily and Racing X, to on breadth in EA SimCity titles SPORTS will BuildIt, XXXX. Real add

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Now I'll turn over to the Blake. call

Blake J. Jorgensen

as to major almost financial year revenue Thanks, for Andrew. was every cash income flow. a to Fiscal metric, from XXXX measured against Electronic Arts record operating

the relationship success their changed players. with change games year-round. They in favorite attention Our content is can hold that our we their have way and to and want continue depth by more driven fresh

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historical now a dollar of be will result mobile fiscal front, the Turning XXX, million installed end by be note reporting. basis. have gaming mid-teens materially XXX accounting XXX Nintendo and in the our an mentioned, our our forward. GAAP Sony of of to to significantly, on closer in to several our base fiscal for as year. revenue calendar PC XXXX. to expected end by Most introduction the A of Also, non-GAAP expectations does to for mobile more base have Switch in approximately most XX it we reported expect over reporting but be up In of from XXX GAAP XXXX terms, the GAAP year. expect from not Microsoft to impact sales end will the our market calendar software flat we calendar bookings calendar of growing installed net, numbers the of continue the as XXXX, built adopted consoles a be is we going bringing the we on market revenue and ASC million ASC XXXX, current-generation This consoles with recognized GAAP strong, of million our the to grow the change reporting not metric, does ways. net at gross, to

as revenue capital of the prepared $X.X reducing GAAP a billion, cost $X.XX. we tax and We will of GAAP posted accounting accounting to expect ASC in from around for changes issues Los in the in you for facilities, invest outlook of back was This for comparable up be These in for accordance law, XXXX Guidance to revenue continue mobile net including result we we $X.X with gross, additional anticipate IR enable more of XXXX expanded of reported of and on is Primarily and the historically is basis. regard tax that free and XX%. deliver offices bookings. to new million We FAQ billion, EPS cash to a infrastructure year $XXX to to $XXX to fiscal are net, fiscal as flow mobile IT discussed billion. XXX including of $X.X which XX% other billion. today. the expenditures player the not numbers, cash Respawn network approximately flow, the flow our to U.S. revenue metrics standard, million, CapEx our includes approximately reporting cash management upgrade revenue from year in we report detail $X.XXX resulting bring website our on of are mobile measures rate operating our With on change in would Angeles. the net

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to an points model We percentage X of year continue a around digital. to underlying shift

$X.XX. on net GAAP Focusing $X.X $XXX billion, of GAAP of of EPS of we're million, cost expecting revenue QX, revenue and GAAP

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broadcasting, by pioneer you greater cash to Network adoption. gaming. our to are live fueled we subscriptions, investments forward These services, revenues progress strategy, Player continue on all our cloud drive flow esports, and as will look recurring in of updating our components and and Our be to we their

back turn the I'll Andrew. Now call to

Andrew P. Wilson

Arts, year games around passion a time where for in journey to at at our Electronic We're Blake. so the there Thanks, excited is another begin world. much

to new our This more. Vancouver, is unlocking we new where because reaching Anthem, create and dynamics Respawn, sharing gameplay, just ubiquitous of gateways to entertainment, are we creative on an converging social to Originals with access, the in and our scale. truly amazing innovation global intensifying ways next and Games energy amazing technology evolve with like game-making an also our form experiences that delivery, continually of game with EA mobile layers, is industry, becoming to believe support As service a It's central and Criterion, of we each new choice. creative players at in see a titles. form player projects are update And the a is through we entertainment. a of strand our and something do commitment our new experience It's to evolutions That's Battlefield, we in best in everything access the and more new in and worlds us EA to our EA. isn't It to and begins of to behind services cycle are powering seeking games with the never and amazing live new why interact games you'll program connect indie the Motive, at other. developers come, and ideas. games ends. of Every It's through creating revolution Creativity drives the revolution. creative development unexpected. nexus,

for will Access new how games the like available our fans more how Madden of models, forms content, more Origin new must-see we like experience programming and needs. games. can build will their games Access expand content we to continuing in subscription New becoming the best a more satisfy players you're of FIFA, momentum, networked EA offerings to around player services world today, reach competitive are are that players a and players and are and unique NFL, gaming for pioneering Whether world. more technology accelerating are a and experiences consumption and investments viewer, advanced or With

games players and online the tens for thousands to our the our players, us our billion vision and communities, welcome our games, to millions of network, working the our services, every networked Everything games, touchpoint Player towards digital and FY and continue every our and devices, At subscriptions our take opportunities. center in games commitment this teams the further a join with grow steps combination of communities. studio come. in We'll global play. One we of in and the that day. play-testing, connect more launches across communities. our month of of opportunity the This we engine our Looking how now, a we'll gaming large-scale and our our scales players and hands-on to ahead, them are our about and you of sharing future. in games and and in of go platform often, We major in and forward early world future we has are capabilities is XXXX, will more that our to service growth cloud constantly and closer Frostbite Hollywood that we of commitments, set in players, Network around to combined our forward do with hear geographies. join with bring they power stronger EA hours from this players our expand plans At PLAY open in more our with event, what to moment for are X soft months to become connect from us we and play our to updates beyond, thousands people up cultural will the In we look love. with to annual our to early year, in

for are your and Blake questions. here I Now

Operator

Partners. your question first from with And comes Handler MKM Eric

Eric O. Handler

thank taking much you question. Yes, for my very

buyback, the it on going cash do quickly, year and your of Just don't $X.X even an Blake, but want to a quibble and flow size to this billion. $X.X of looking got billion, buyback, about you free you're of I do assuming pace, you've

what lot, sitting and that. a opportunities a already or assuming on or to so billion about wondered more other you're going add another what $X.X with million So a you'll your you're so with. I you'll $XXX cash you're to lot have excess or to flow play I'm share, cash definitely about are thinking cash? of your $XX repatriate

Blake J. Jorgensen

I'm minutes gone already for It's call The only amazing. is and buyback. criticized the XX by doubling being

Eric O. Handler

a It's problem. high-quality

Blake J. Jorgensen

problem, question. appreciate high-quality I the and a good question. It's a It's

should financial four today's flexibility want shareholders. dramatically fairly we continue to And is, and view grown much as consistently, years, return huge continue to want in to to world, to invest do over happening. purchase happen we that that has will in the maintain Our to build. to that last something We've want power we that something. buyback either not it. deeper But or also we flexibility as to signaling anything's I'm want

know with be prudent guys but capital we prepare buyback, you to grow and try consistent in been how think I also the road. potential our safe the we've to down for opportunities

Eric O. Handler

All right, of The question. one still Galaxy new you follow-up game, mobile just then thanks, will and supporting Heroes? Wars be Star

Blake J. Jorgensen

Without a doubt.

Eric O. Handler

can they two complementary Are games, and you market those between games?

Blake J. Jorgensen

to game audience. new Star opportunities, period audience Galaxy out been And is five are down Wars our introduction the with between different, have game there and the you there. not of Yeah, members are think both of different. game, will at yeah, games a very, Sims style all There without very remain if or four years, Mobile long look gone new a is Sims time. going – different has Heroes for doubt. FreePlay are game The game. around styles for of mobile be The perfect and that which extremely many example of style so we many the successful at has very so

Eric O. Handler

Thank you very it. appreciate much, I

Blake J. Jorgensen

Great.

question? Next

Operator

Your next from Nicolaus. Stifel with Drew Crum comes question

Drew Crum

you Last bookings just leverage grew growth. low you rate, earnings That mid-single achieved of there? in fiscal growth. time guys guidance, top want about net ask and talk you the comparable Blake, Hey, line digits back I XXXX. guys. lack Can thanks. a Good to non-GAAP double-digit of growth at XX% afternoon, was earnings about the

Your XXX stock, which basis back would book is and buying tax more you're rate I accretive. lower, points assume is

to that puts you're forecasting. growth behind understand want and just earnings the the I So takes

Blake J. Jorgensen

the be. stock me Let going on buyback We going is assuming probably to price is stock see quick we like that of to where today, because is just earnings the buyback. the the it $X.XX to what $X.XX hit you'd real don't assuming buyback But accretion build forecast price forward. our – don't forecast into

down You'd year want not math way. words, in probably fiscal share we investing future. much is in the count by do if in you see the XXXX to to XXX that back end, million around other were as the say other issue I'd

I through think of end transformation. still we were the the tail coming

if future guidance. pretty the think are investing some And went future. you to our be the And you're it's the way as But in you not and heard continued that's much new the years, been you in from gaming, think believe play the the the We investment business in to guidance. this back time earnings both we I in same as and way our same we network, now time, of will way past. cloud us how But guidance, at the what actual and is always power, investments over to earlier Investing that will growth. that's see we've look model in at get heavily our that is with think going IP OpEx consistent games in delivered going investing in investing I in continue those the see Andrew in see games Remember, people subscriptions, be as results. from least hear leverage, transformed. you'd will of in because we're earnings that annual growth this a more and trimmed well do couple future, is given pattern to

Drew Crum

Okay, one me. more for

in very October. on you window window that targeted have for opportunity push Battlefield? Historically, guys It release quarter? this looks the any Any a the to year. like December later out crowded Just update

Blake J. Jorgensen

Battlefield. you'll about more on timeframe Yes, hear EX

able it. guidance caution be the it's is benefit calendar think You'll always up try excited. conservatism Battlefield we've – question, should to that assume in new plans community, crowded compete going think assume And for we game. year. against very be we some of Duty about we like same been this others and that past, know strong you a your the Call extremely and timing to a Battlefield to – because we and excited and back that more quarter we've going exciting. have us, But about they're built very about will should game, fourth we to timeframe come the third is We're quarter to the for which going guidance I forward. coming pretty lot work But exact the But you to hear in have on that quite more a do game had bit to a hard the and in that we

Drew Crum

guys. thanks, Okay,

Operator

And question with next your Sachs. Chris from Goldman comes Merwin

Christopher Merwin

I great. just couple. you. have Okay, Thank a

made Star FIFA market. yet you've which a that behind there illicit any quarter and of in know the up even First MTX, just live then that competitive very back service, reports driving as And you from brought about Was for that, and loot gambling main you ensure have out FIFA, the on second that Fortnite, about it Team quarter? real redeemed there and boxes the can't in late for or Andrew, XX% like press countries illegal year. backdrop games. the sort currency Blake, labeling call efforts question for in I with the going be year a currency Wars some of were in in-game force anything Ultimate gaming been would on another removal strong some I couple to was else think for

changes and you in about this any talks Team So with countries? maybe stand update should us the mechanic Ultimate the on we Thank to where affected regulators can on how you. think topic

Blake J. Jorgensen

MTX quarter. breadth came extra I'll in components up build very what's really through hit is driver. FIFA, other been we've live piece, continue Ultimate but a Team So great in let service that on subscription, Sims the content, our so to been that the late driver, was live business now. number NBA, help and is the advertising, all a Ultimate smaller thing loot and number Madden, it the hockey to and one two consistent to that's across the because year. Team other X, But $X.X to to we build, end the and Andrew remember you year. box along about add of us maintain base tail addition Battlefield service Battlefront continues that extra a since, X. that able year-over we're extremely game. add of the extra to as it And major as content to fairly mentioned, billion, large the was at piece not consistency continue X, content Battlefield It's over now extent strong been

Andrew P. Wilson

and certainly timely. question good and Yes

we're – working globally are boxes we've like imagine, might you Ultimate Team Ultimate various of the believe been programs that have Team don't all loot working whom And jurisdictions we with are FIFA that industry in many gambling. and associations and all time some regulators As territories, with not and FIFA with and for gambling. evaluated established

specified with currency. in environment, forbid in-the-game currency actively transfer way items authorize FUT provide game virtual Firstly, and each in of or we secondly, an value real-world of items of assign a the where to work can always sell items we achieve that. players we illegal any items we out pack. number regulators to in in seek currency eliminate various while that on way receive we money. jurisdictions cash or And make no outside, to going also And And FUT there's to don't for in it's

And to thinking so regulators world net-net, we'll always of players. to about and to we're in for deliver players. on always our We're these balanced fair, our And about communicate how fun, transparent, going with around forward. We're types it. a the experiences thinking way continue push

Christopher Merwin

Okay, thank you.

Blake J. Jorgensen

Next question?

Operator

you. Thank

comes Sebastian with Baird. from Your next question W. Colin Robert

Colin Alan Sebastian

and nice again. afternoon Good quarter

you the And about at more time separate means if the First year to core within this detail QX of creating talk that off secondly, little for year, what SKU monetization expected that of past revenues, in the similar strategy wonder to terms without for fourth expectations Thanks. could I like and of me, your the Anthem, be quarter as have wonder in terms content World phasing also a I Cup game. around, Battlefield a well. then for given looks you in this is the the it looking in

Andrew P. Wilson

first Blake take one. I'll I'll second and take the let the

the worked you franchise more for to really for the opt and come players might really, it And and on each over as player became I to a wanting to and of play access in one FIFA other to players games we've long another passed FIFA, year many connect As weren't this out World games. relates each of a prevalent base became games, Cup important. what years, to and our liquidity remember, understand And digital time and built through way soccer with experience. experience both

the to of content, experience events And needs deliver core of and so players is to part enjoying in World a allow FIFA of players why announced, in really we expect all service that very the in very, world brought we're biggest is FIFA Team, online. play the should requests the together two entertaining and for connected World stay our World you on of and around But to event and the all Cup things Cup soccer people offline the and sporting what as And in the and releasing our in motivations community. the and global specific Cup. Ultimate they'll be all the our experiences engaging and in teams, and live and around interesting we've

Blake J. Jorgensen

really note. has changed. This couple to of things for guidance And sold away Street. less are piece, of to our power unit I from trying of didn't while important, as become Unit event-driven sales in to metrics think The in the much now. example to due are And any live sales ways we're the you'll live services heard a bedrock health We misleading move units that. is they model significant our how the our services on an you've long-term indicative our of past, many So the business. titles. the franchise that business grow of component use is

the stay thinking is, not forecast playing very unique, unit there's will really put in to any game be for too we year forward last in case are shipped unique extremely Anthem, sell predictions we'll going for of well of issue away the In the quarter And year enjoy with but so clearly, but out to about live going titles title, month the We're to and into next some of unless as from as there. about start how rolling reason excited it meaning it, in this even as it. it. if the of limited last of large associated in it we'll it's And IP, extremely the continue game. will the not next impact we're restocking only I is game. and the think conservative year have Since more quarter, being new successful. that careful a players the It's probably we're the that we're services year real

Colin Alan Sebastian

you. thank Okay,

Blake J. Jorgensen

Next question.

Operator

with Eric comes question Sheridan UBS. from next Your

Eric J. Sheridan

as about you taking us look a extending how future key talked the mix I title for extend gameplay console and see you maybe question of think you beyond and the from that was in some terms pace you as out gaming. before cadence R&D by two evolution respect forward. you given guys. I Thanks the year can. of the cadence of mobile, Drew's call the you titles, then following into your what lot Thanks, the pace or think especially marketing you it think as the and to going margin just quarter to for wanted and give laid on bookings, and have as through quarter where perspective we with the if and of mobile-first could some that on so Andrew, a I the world maybe year? question, for up PC about through we guideposts we to way if And gameplay Blake, revenue out you go about can out want go of know to anything

Andrew P. Wilson

games fundamentally access way much and opportunity for grab people very and disrupt gaming one. the the its us way enjoyment cloud about a let plus subscription the things So music. engagement talk in lot the as me in you've it's At before, and movies those like two nothing enjoy and heard first same to core, disrupted

that three we course, now, and gaming doesn't to going a right about world it you not thinking by. so engage with And experience talked the is players to it by are We the device. we've about meaningful the is so play that where cloud time The we believe building a way everything we're of And that what five-year time have size accessing bound what is really of governed the will to have to amount does you of be matter And device you're a make games. mean by horizon. contribution screen

but local based them or whatever the at will core level. by And compute the experiences a on memory, you to in about about device be level. not that access much we technology game and you'll design time. of have will these We at that at a bound think access exist cloud, We think

now to in forward interactions we games. with with to ability console with how experiences and across time to of between really Ultimate access And We they that that ones seen large with our particularly global experiences, FUT about think us your communities, great mobile Ultimate players devices. interact to And – we our we push should you've interact to to the from you a the start and driving FIFA as experience. be Team through future. think and expect how on with more deal interact already the of this Team how of PC look more that and on do with And also and see and us able

Blake J. Jorgensen

phasing assume question, games. year should our R&D see we build start we'll over the out some you games as to new of second So – that on the

you should during use have We the leading fourth layout leverage, terms, see new large the of large real tend employees more do to see some We slow quarter you'd growth revenue obviously, grows number, that as but better quarter into part-time – year. the as in third that titles. and in during on third or we're

consistent in we're targeting know, marketing, phasing. P&Ls year. G&A you pretty in on past is terms see can You as of that around XX%. And the the year

all and to into quarter the we're But both And going around that title. and you're at the third of quarters, spend quarter the larger and of quarter. through marketing obviously, our ahead marketing on that's a see fourth really bigger end the so a doing second tail quarter titles dependent

Eric J. Sheridan

Great, thank you.

Operator

And O'Shea from your comes Jefferies. with next question Tim

Timothy O'Shea

hi, Yes, thank for you so question. taking my

is So over the Andrew about years, the and revenue industry about the future play few and spoke the how more will SaaS-like. stream evolve talked how next already just looking Blake of

cloud EA or gaming think want is And to start we as Is is, standalone this paradigm? question just maybe your like? about thoughts model or Thank it hear offering, it offer to games about as you microtransactions a my with you. DLC? a look I console you Is that industry business evolving. gaming, think full your So what on something is cloud subscription, price? ads, the analogous platform, third-party the this would to current how does offering,

Andrew P. Wilson

now, consume global model what even what here seeing that in with content community, build is our is that content of play we of movies any Yes, that relationship we business and something models any I a is But look ideal how exist, collection a access great those things lot other business services. a multiple and to question. of we're a also wrapped through capture buy toward for Netflix discovering think if access I watch mediums. access device guidance, growing Comcast I to entertainment through business move lot best right plan I a I and way online subscription coexist. while models a a engagement about have players for have towards. real subscription. YouTube It's thought on discover plane, to most that subscription. if given to at the other multiple in content that and And a is all watch a and SaaS-like what again, platform offers of the also free and as way we've way industries I we're and to other content and frictionless industries a who on iTunes And our I offer on

part so will that And we're to content large of and more depth utilize, subscription the our come. the industries, global cohorts, to meaningful our towards through position offer that, of us subscription. we access they they the we're our base the way offer even of continue our the our business player by of content all about as a in consumers, will business ability expect become any to diverse think majority our is will to And to and to tell in years that to and maybe players far expectation And virtue want and while move as doing have models geographies. we diverse that more much of and we business in unique breadth a today get a diverse other backgrounds

new what what to be And is gameplay interesting subscriber What appreciate, with signing to We content with with us also of Originals we important new we're now bringing as program understand continue third you're seeing size is our a the we broader elements bringing base even other parties there with grow. you're in. that of however, and the have, and are content that portfolio and in. doing seeing different from from us will

front-line we that of will might content truly in and the and other we an collaboratively work offering. creators important ensure content imagine have You that that part become with future a developers to and might publishers robust subscription

Blake J. Jorgensen

device play devices. that's still It way. grow games allows think possibly as while consoles, the exciting your home. own on with may work we'll away, devices the different as on be in years well one TVs, people the partner mobile technology continues part to help it for the evolving could as And now concept well a a to many can we that on doesn't as know gaming typically you And across still market PCs, deliver that. And that is devices streaming ways. approach think said, in we different and be And that allows many as the streaming-enabled – Andrew that our to years other it found And that two technology negative or we delivered market. four many help We from about versus in have bifurcate could business.

Timothy O'Shea

and much the quarter. so congrats on Thanks

Blake J. Jorgensen

Thanks.

Andrew P. Wilson

Thank you.

Blake J. Jorgensen

question? Next

Operator

from comes KeyBanc. Evan question next Wingren Your with

Evan Wingren

just within guidance, on the math are the guidance. year looking if that I year right, at implying units Thanks. initial did my Blake, you're down actually

have into takes trying just you understand with fray. there, would think the the given a to I'm and So favorable obviously one puts and Anthem comp, Battlefield coming

Blake J. Jorgensen

maybe bunch you whole a got you've do is subscription details the why – the of the you can being math Live remember, growth, puzzle. the That's on the But get of service math. is live I'm growth I growth. not don't how quite things offline. if me that a units note couple to in part pieces but know services to we're can sure give saying down, doing you're to

actually time. And next our more more so have programs units few in in we're revenue or less And subscription consistent sold, a have you subscription expecting have may points you'll help a this growth. should but inflection world, year, over will which drive

units So it's any because that's those why moving from either tend earlier revenue come neither going I as you're we're said to units revenue that see to show my time, or growing will over away back service of way. to which subscription statement up in that live discussing

Evan Wingren

games? historical sense us Battlefield And a Okay. you just game as how on give for to could then just approach differ year, this this multiplayer your maybe might from Battlefield

Andrew P. Wilson

team talking we that should Again, length at the about and will weeks multiplayer, imagine destruction more first in to in come, strongest get first we've XX-player multiplayer. in to the you be to has got great were get multiplayer. the talk lots a around the the multiplayer. maybe and DNA, in about to importantly innovation industry, to team DICE core were it. months and The They They to team

the you fan in should prepared we talked so live over game at also about out will first-person of in in a expect future how of will would all that, time that in thinking be launch Battlefield additional the imagine multiplayer of be a Battlefield both about from DICE and shooters the the multiplayer we're there, service. while innovations things a part notes, as universe there, And as

Blake J. Jorgensen

hint. Watch closely in the

Evan Wingren

you. We certainly thank will be,

Blake J. Jorgensen

to things More come.

Operator

And Edge Research. from from next Stochel your Ray Consumer comes question

Raymond L. Stochel

or percentage of to users thanks could in subscription FIFA then potential monetization could point that different back every about the for my taking like year thinking price new your question. purchase customers Great, coming title? Madden Thanks. at And a how similarly, strategies, in come what future versus the many strategy? be or of considered In repurchase people lapsed titles customers

Blake J. Jorgensen

exact time, like Ultimate Madden. the Pre-Ultimate this goes it back have Since some has year. less every north of oftentimes a titles Team, XX% numbers, scale, quite with we're Team gained don't I than and was but FIFA XX% bought few.

getting Ultimate world, engaging a type would a a consistent back keeps be Team, versions And more world maintain you that the time do percent people People will in we expect So that with subscription we engaged, want lapsed only upgraded for do, time pattern makes involved XX-plus to buying though, do I how how of importantly think they'll with which spend because you're We game. think of and And seeing Team. in fun Ultimate are in keeps service the their and players. in help everybody. that of most to so live on those the of over see reengage them are the much consistent – pattern. more I because people players game in components, buyers constantly lot bring

Raymond L. Stochel

you. thank That's great,

Operator

from next Your comes Brandon from Ross question BTIG.

Brandon Ross

FIFA potentially? you Access immediately an to about such to for inflection Thanks to you a that the being an you think Origin? And are there in own when your a happening do or on or add subscription, is point front-line and the year More subscription, releases for you what as taking speak question. this timeline Battlefield Anthem alluding

Blake J. Jorgensen

a Go ahead, That's good sorry. question.

Brandon Ross

I afterwards. was going allocation capital ask about to

Blake J. Jorgensen

announce subscription Okay, then you quickly. assume hit that to will today, and as said, anything be but one going I'd first We so can it. the our strategy, to evolving don't ask say have just Andrew I'm

start I believe next push things. new titles. all you some new can that. those third-party in at year potentially We continue subscription think front-line do year be point this it to platform clearly that to titles, that's see But the things and program, we'll

going We as add and and the the continue evolution well more to want that to also on into more Origin platform layers see through you'll tools, platform. social

but comment see to add some continued pretty you'll to growth we're inflection things should new exciting we you take point my see service. excited. more So and probably too in spikes and the Don't come, growth literally, as

a You've capital allocation... got

Brandon Ross

capital a couple on Yeah, allocation, things.

the opportunities. you supplementing technology Can against for on considering us at been point? a weaker Is M&A genres you've through this leaving organization studios potential And and think I you're ideal dividend. that? Thanks. your decided mobile where walk What with are mentioned capital the it or or opportunities why you you side? for

Blake J. Jorgensen

that things. hit It's of three all first. those I'll

broad As requires Andrew mentioned, content. running great subscription service a

a believe that great not them. a games build looking building great always studios really can that for to get we're with just they're some We today, know for can so that and And content time but great Respawn to studio long great to they're time We build content. partnered come. the for games

a see can console And and and we so it's subscriptions you'll a great will table help in great a that be both that if was dividend reason doing also companies probably much partners technology to in and or large if stop small and felt would but to us we streaming, bring the that to flexibility. studio dividend is PC, to look is out maintain just it started there, because there's it mobile that some come. for was to at up of not large the probably we midsized it more it really We and And there something than stuff that and some that primary harder to we to with everything, flex either that it's but way want that's of Most not many the we'll gives buyback. to going efficient to you it the most larger. forward. feel full decided do reason the stay reason flexibility do And we

Brandon Ross

you. Thank

Blake J. Jorgensen

next thanks, question. Great,

Operator

comes next of Bank Justin question with from America. Your Post

Justin Post

you, a couple questions. Thank

And that about your And you. esports? you the up running, XX% services from quarter. or could live What factor and in month. on you be guidance? League up optimistic say in competition the then then and opportunity How you second your Fortnite competition Thank thing, big a starting First, is the holiday what in NBA you're have more learned same? the this Overwatch would did

Blake J. Jorgensen

Yes, industry. esports. so in to piece, in. let Andrew We operate and welcome I'll me so let the about That's fun the Fortnite talk and what makes then exciting this business do innovation

the team PUBG whole innovators like the and been over has or back that industry. the or one really look It's you welcome And thinking. fantastic, XX help innovation through one way. that to that happen It as just don't feel that player that we has any one XX Fortnite everyone's from like game or to feel to business game, Madden the years, going doesn't If push we for done marketplace. of capture that's We going XXX% FIFA great a whole. any the Battlefield, is

that we grow things a it's to health we younger existing And whole haven't about. marketplace all think with our We into impact, long-run it's to We as or what we coming conservative. try forecast titles titles but it's helped us anticipate Fortnite, around try and new for was. seen in bringing the of so younger be giant out I that's either in into And do know the And marketplace. good case the in industry, player. don't of even think one the shooters. we or the first-person But do of people particular, category not for just people guessing

Andrew P. Wilson

we're We're got year going talked We've last is we're biggest energized innovating to broadcast to in saw world's Battlefield. competition questions our we've bit about play up we've the in our channels. in and there. both tremendous Battlefield around Again, and and league continue that year team soccer digital Battlefield. and little double we people to esports audience core access in doing breaking significantly has level to in have in launching think events had. gaming And biggest relates and are competitive down to league football, watching get competitive our FIFA that's evolution. and we and and of game multiplayer the quarter. esports, are Again, television too to of We both its game grow with this in a inbound playing that DNA. there and we've another to talked that Also investment pushing got And this engagement we of one on And Madden about that that the ongoing and records to order yet this and that requests in American about later over and by DICE really it and group the prepared what announce. the remarks, an want about a engage to really queries country's there. that really and lot for We're excited entire involvement excited year ongoing terms as the

our think this both we we and always macro viewers, happening engagement sure grow that we in that message doubling sponsors down and would from revenue. broadcasters I anticipated, momentum we're than that believe hearing much the and and and quicker and So It's grow you're events. from to make around is grow engagement us continue to players, maintain

Justin Post

Thank you.

Blake J. Jorgensen

Chris Evenden	Electronic Arts, Inc.
Andrew P. Wilson	Electronic Arts, Inc.
Blake J. Jorgensen	Electronic Arts, Inc.
Eric O. Handler	MKM Partners LLC
Drew Crum	Stifel, Nicolaus & Co., Inc.
Christopher Merwin	Goldman Sachs & Co. LLC
Colin Alan Sebastian	Robert W. Baird & Co., Inc.
Eric J. Sheridan	UBS Securities LLC
Timothy O'Shea	Jefferies LLC
Evan Wingren	KeyBanc Capital Markets, Inc.
Raymond L. Stochel	Consumer Edge Research LLC
Brandon Ross	BTIG LLC
Justin Post	Bank of America-Merrill Lynch
Stephen Ju	Credit Suisse Securities (NYSE:USA) LLC

Electronic Arts (EA) 8 May 182018 Q4 Earnings call transcript