EA - Earnings call transcript Q1 2020

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Operator

Good afternoon. My name is Christine, and I will be your conference operator today. At this time, I would like to welcome everyone to the Electronic Arts Q1 2020 Earnings Conference Call.

Mr. Chris Evenden, VP of Investor Relations, you may begin your conference.

Chris Evenden

Christine. Thanks, First Earnings EA's Fiscal Quarter to Call. XXXX Welcome today Wilson, CFO our me COO. on and Andrew call the our With CEO; are Blake and Jorgensen, Please release our note filings available at ir.ea.com. that earnings SEC our are and

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

we to call, our post the of accounting this audio a transcript prepared financial call, FAQ. a after model, an and replay will Lastly, remarks, this an update

We Shores X, events This and a and Tuesday, Meeting Arts to QX as to today. will Annual disclaims take and here update refer financial them. of our in July forward-looking XX-K recent makes of Thursday, our discussion on differ October duty discussed our the XX, statements to regards XXXX, earnings results Redwood With cause for Form most XXXX materially may performance to differ actual events include Shareholder the expectations. August our for Electronic fiscal that regarding call these our presentation calendar, you place could scheduled risks Actual those future company. results statements future any today, comments from materially our of is and and XX. from

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

turn Andrew. I'll over to Now, the call

Andrew Wilson

live Players with and to start content of 'XX. growing in fueled peaks strong were new top events engaged reaching engagement a delivered in-game FY We Chris. our communities in deeply Thanks, our franchises services. by

fiscal by having great first significantly to games, exceeded we're in experiences a looking throughout quarter. our that operating We're expectations our As the are more results for lot a delivering and year. forward our players the the thrilled result,

and our some drives our great breadth industry. with are of competitive this to leadership of in on and depth continues live our strengthening We're services, talent and here. for engagement. expanding tailwinds subscriptions expertise our I'll of deeper the expands EA growth and highlights and and reach and the With touch technology. IP, these drivers core portfolio backdrop, entertainment also in our for [indiscernible] few a of continually player grow global base gaming the that drivers Interactive foundation

Let's with Apex Legends. start

a have to in X months. several and engagement such service, the gameplay character We massive be that there the and X and of Season at is even of content, environment. launch and And will event global engage active of to and most Season weeks time. additional of has the content events next continue that of early one in free-to-play X a throughout There and a few service we've course will will continue Battle Apex including a up over weeks and be drivers July, built experiences tremendous date, live each content the as are audience we're core Pass high-quality new bring more the weekly new fan-requested features bigger. growth delivering in Apex. in-game have to to new its deliver expectations the daily in-game in that drive our continuing shaping for since it of In as new to to players. updates and outperformed come significant updates engagement our weeks at offering, live to with it had additions the season, robust experience. in are begin We a that launched the coming start In and collection longevity each seasons roll of out season Season this to

the are fantastic elements, All designed community Apex additional the events content over new and in-game seasons engage of the and term. long excite gameplay, core these to of continually

also Apex great first drivers the we've teams, new competition Interest of We're that growth ABC. interaction broadcast to from We'll in event, the world was including social into Apex additional and our first at teams ESPN bring and is official in for around ecosystem. had a strong and on ESPYS will success opportunities Esports partners competition broadcast X from participating our exhibition Legends. have expanding with and September. sponsors the competition around

more launch is reach bring the and In plans in worldwide a players fans, also growth FIFA core to are we SPORTS mobile Our new delivering will NFL Legends like to course, our portfolio, are our EA in esports. China to future. innovating and and for our share plan on and on franchises Madden Apex our leading

Looking at Madden NFL. first

We continue X-Factor more Team. from We're tie-in the and all away fans. now personalized content in franchise. days the drove gameplay with new abilities, just Madden football Madden Superstar The in events in the campaign NFL to launching this in and also in see QX new Draft deep XX. fluid appeal like NFL and career deepened Madden new players Ultimate service innovation year's Live designed are to XX new game the existing joining to NFL engagement and year-round core growth engagement

success last also NFL our drove record digital the NFL ecosystem season XX and viewership. and looking to more Championship engaged to Series. Players growing now Xx esports NFL that than on Madden Madden continue in with drive broadcast our build Madden viewership. competitive We're noncompetitors events

teams, Starbucks. season Pizza competitions We have major with are including welcoming with our sponsors, partnered and and key NFL SNICKERS we're aligned all Hut, big XX NFL

Finally, Through bringing of engage new our and leading as in well the Madden fans. latest and ever-popular esports to love modes as on game Mobile classic great fan Madden play Madden NFL reach PC, customization. NFL favorite fans that game the console this game our continues innovation call a some experiences of launches And of and Mobile audience the is tomorrow. the season social NFL wide back programming, and year,

engaged players franchise in had our with Ultimate had FIFA -- a deeply service. QX Our Team very a live strong strong

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to new year. players reach fortunate console, vibrant to PC incredibly mobile, creative up continuing and franchise community open we amazing an on and Sims new are to are Sims this and and dimensions this have double The We exciting down on of

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to of X looking vs. where market deeply mobile growth To drive well mobile new our X. competitive innovation testing world. players. a is and engaged bespoke to XX we all like more started Heroes PvZ the Star brand franchises Mobile more something play. grow downloads develop Galaxy We've date, challenging, be a players pre-alpha content community and nearly grown of in-game more Mobile, services Galaxy The strong a continuing Mobile and of Heroes to vs. Madden fans discovering games beloved Sims and as games to engagement. to continuing to as complex key is also experiences billion the events prototype projects space launch-to-date. acquisition on continues is our audience most and concept we've in for of around ongoing new are an we're new us. and of most delivering plan Zombies had Live to than with has to Zombies cross-platform mobile the mobile unique continue can mobile this bringing great one The year. new opportunity business gaming. be and worldwide Plants focus million FIFA in Wars: aspect has Plants for and mobile of just bringing We're to for of forward In our the

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Now, I'll over to Blake. call the turn

Blake Jorgensen

expectations Apex And franchises. We our players were on Andrew. X Thanks, across to are Legends above level, our results July delivered those driven this the of by delight significantly continues impact at since X. high and broad we operating strength results Season quarter. with pleased launch core its

refer of operational the relevant report discuss combined then the please the demonstrates measure specifics model. downloadable basis, measures, power bookings net the results our strategy, to our To results to deliver of portfolio reported result compare this financial our with our quarters. content, a use quarter's GAAP in relatively strong I'll in dynamics on of our to quiet how quarter's even tabs extra results of business. This historically non-GAAP

year-on-year. income expenditures above flow million. $X.XX Operating was driven billion a forecast, and a Capital Underlying our expenses. million, $XXX the and was $XX below primarily up year. $X.XX was million, by partially share Diluted for revenue profit over spend. $XXX $X.XX, year million our last earnings billion. This investment million for offset gross was compared and $XXX a lower $XX in $XXX the of new for driven by was cash per resulting flow well EPS See million guidance above bookings, XXX% up the million net to year Operating continued quarter driven our cash advertising and further ago our were $XXX cash ago, EA's for our by million $XXX were IP. to of Operating net earnings months quarter marketing, million. flow by year Operating by was $X.XX expectations. free operating a expectations, billion $XX to cash above expenses slides ago sales last in compared was from timing XX significantly information. flow compared

of leaving available X.X also we cost program. $XXX quarter, our the in million buyback million, a shares million at $XXX During repurchased

at $X.XX billion, quarter X% of Our and short-term cash year-on-year. were investments the the up end

like business our with for XX-month our bookings strong I'd drivers a represent approximately $XXX key of million $X driven quarter. Digital by the Now, ago. trailing of services. flat to up guidance, across $XX Net core were million, XX% turn this million, quarter basis, business year performance from strength was on the period. to our On the a were to million now year-on-year. $XXX and above compared bookings live board our It year-ago XX% digital net net franchises a bookings

in of quarter's at bookings components Looking this each the of digital turn.

Diving Apex and rates. and X with led exchange XX% by at First, QX actual year-on-year X% was launched Legends currency Season Legends we're and with its at into net a million, year-on-year $XXX XX% to up or detail, were of service Ultimate Sims the both for performance bookings the Team The Apex at pleased to engagement. FIFA regard X. up live beginning sales constant

with the We major will continue quarter. quarter mid-August, in content and next during a X begin to Season add event will

development and continue increasing to growth We drive also content in investments are Apex Legends. in marketing to

where positioned FIFA X outperformed to we Asia X X well well FIFA FIFA Online transitioned Southeast Online we expectations Online and in our FIFA Meanwhile, are expectation. outperformed China, have over X. for in FIFA performed Online Online our FIFA fully Online to X. Korea and from switching

remain Finally, The Sims its nearly fifth on Sims as growth base delivered XXXX. to million X have the game and Andrew in track year mentioned, The consecutive X following promotion launch installs, of in new we X

down Mobile delivered year-on-year, XX% million, net bookings titles. by of driven aging $XXX

over now XX% One last A the $XX of and are down promotions engaged Although last about bookings huge X expectation million, console sales Way than optimistic shows, XX digital outperformed World game movie and park rather TV with Out FIFA months. Star down PlayStation Star and launch Wars: leading XX% franchise on user new year-on-year, be due the of Galaxy of year Heroes the year-on-year PC base, to our Cup in and quarter. a net Xbox and launches. to and maintains theme measured generated our Full year's performance physical, for a unit downloads highly of XX Wars us

points this X model points, to last is Although how year-on-year, X up we digital of strongly percentage an digital side of was strongly the given percentage annual Anthem -- during Anthem the quarter. launch continue shift

our and events Before release impacted to press that -- like for there events. discussing our GAAP guidance. on Please in tax QX were our GAAP I'd full highlight three tax to income the those details results refer quarter those guidance, that for year

operating to or the XXXX. in $XXX for second phasing is quarter changed benefits fiscal first 'XX than this since guidance and we we Swiss expect was rates cash our better in be of expect $X.XX change, FY although occur As billion last not which the QX remaining between included and rate recognized the tax recognize in we quarter, guidance. the to above tax that QX will when fiscal the $X.X the the a We amount million of flow a do quarter. management expect has billion million gave events our year, which recognized the to $XXX result, our benefit impact in we

guidance. the of GAAP tax full reiterating the a to for our $XXX we EPS, are on $X.XX year. turning Except benefit share for million or of increase Now our guidance

expect and in net the range. $XXX bookings to Sims million million Legends continue The We deliver to $XXX each Apex to X

approximately cash billion, We guidance are holding our with around at operating be $X.XXX flow free still expected cash to CapEx flow million billion. and of $XXX $X.XX

billion. $X.XXX second and for the expenses expect be the the launch We're upcoming Legends at and FOOTBALL revenue quarter share to billion, For the cost be bookings event quarter. excited the NFL million second to VOLTA of Madden $XXX to Apex for net with we very quarter, revenue earnings of of launch the $X.XX results XX the $XXX of anticipate and the million. quarter. operating $X.XX of We continue net in This per of about end FIFA

core result for to quarter a to this risks. enable opportunities the us over-delivered a base invest as our solid and innovate of We in performance franchises. take business evergreen live provide of tremendously services to These our and new

X. We are as major successful we content only in in as playing and unique events play. peers Legends innovations in Apex them, We this they networks. to FOOTBALL consequence in People and with to are to aim want we is invest players in FIFA laundry a the of in that cloud it's we're even successful adding or Sims we're business. or whether in that, fun, a them legends give modes, such VOLTA new The If engage have our continue and player no and our gaming, our they to fun subscriptions if games it will strength among keeping in leader

Star ingredients Apex our year. Order. live storied core a one in have in look up forward invest FIFA our of place progress right in for I to more Jedi: The the Coming have business combination services franchise, And installment believe quarter, new we XX through August, and most you the right IP and in to The and we the Madden Fallen continue the reporting NFL. our we will models. success We our for and Wars quarter. more the plus to quarter. our next end fun new to business. latest new new deliver players for newest of of at launches IP, Legends, innovation drive following technologies success Simultaneously, we fun our have on plus

I'll Andrew. Now, back to the call turn

Andrew Wilson

The play Blake. games. world to Thanks, loves

gaming continues experience. grow games more love, the spend the have of with global be is the inspire At and to important unique a to and that connect to of an ability increasingly audience shared entertainment daily of heart As time life. social they the connection, this is interactive games part our players part

platforms, new will ways to the industry. New new through technologies for are to engage we continue positioning fuel growth to these EA And and opportunities, lead.

the base. fulfill of global with begins a diverse motivations games can great It that player

continue We breadth deliver seek. across of to the and experiences invest to portfolio depth, players our quality that

top hundreds owned popular mobile. Fallen industry, are millions We've some sports, new Legends and experiences titles licensed The of of Apex in connect powerful Our PC Star including in most on Jedi: Order. players racing and Speed and of like IP building simulation, we the create experiences We Zombies. new and console, across vs. IP Battlefield, shooters introduced Need for Sims, Wars the Plants like

more work for to bring our to number and of favorite of as to current devices. our games players revisit we innovative plans our high-quality a continually IP and projects is pipeline full some fan Our new franchises, across of new platforms growing brands

continue Each They in more serves. the can more. engaged love. The adding deeply our Apex come designed powerful their enable we where great Star the And Team, us continually exploration and communities to and service uniquely also community the they for share players, building Ultimate enable their us that in had innovation build and in player base drive to and live long-term from future. is experiences services players we're creative with Live We've Sims, now, to motivations Battlefield, our Wars together in massive different, Legends. so communities success feedback it learn

today the of entertainment transcends a act game. playing Interactive

that becoming addition the are Legends in New just be everyone games, broadcasters this our we competitive Madden, important. delivering franchises. as the ways year. viewers, players, for major new competitive gaming is competition to look With We FIFA to around to to a with scene ecosystem engage to have global largest our can and more make accessible the bring and games sponsors esports to and Apex going we And more like the forward sports believe play esports world. opportunities to of

with music compelling industries of consumer proposition in where We services. different with With to is important the an because part compelling more it how access ways at offer We great to of even games behavior. with same subscriptions low video with When lowered consume more barriers television fundamentally jump becoming connect the shift believe more have streaming, our new subscriptions. great and further, demonstrated subscription content communities. ways consume tremendously players. value for friction. subscriptions making can value in content cloud new music happening even Other increasingly into subscriptions offer lives, new games because combined games are different We of

continuing PC. subscription is creators, for console and invest both leading players powerful we're and services on to The our and in opportunity game

is drive come. creativity, the We and quality and the ways updates engage, sets shifts form more in transformative of to great content games, global this innovation will apart and other The With new experience fun and months In push our progress forward we communities on teams be to aspect now from to and more every there in are to passionate addition entertainment. of future. of engineers, talented every industry look to working more through horizon. incredibly sharing of what artists developers, player the the

Now, are questions. your for here Blake and I

Operator

from your Stephen Suisse. line Ju comes of [Operator question And Credit first from the Instructions].

Stephen Ju

before, should global. we a China still be path FIFA have So is recovery this only this game talked many the right Online but about like is Korea, in Andrew, now, Blake, it opportunity on I Southeast And think times distributed and seems Asia.

or now. you you be between may seems are us background? things Because stand you it right this multiples for like that game Mobile either the audience reaching tell the doing demand in be of can should FIFA the So other you where

Andrew Wilson

have game access strong think FIFA and opportunity again, which -- together growth we people. football market, to So passion there country as mean like through fans free-to-play might for different to soccer about depending the the together platform their entertain share ways a we for that fans in with going different we in I on now, and through a you're million think feel brings We from see game. that that them couple feel models. about we Asia, we or an on for subscription that the like base. certainly, mobile Ultimate a on but player different platforms in when offering console, through in global you services across given offerings hundred games premium, In PC live any probably we business and Team, think different to we like mobile or Right PC have really

that we want the grow traditional than of that type who over love We as we we You can expect to more should to range how That's on working the that for imagine a that users we that's also we'll we're time, year. thinking of whole focus this about but think more are attract a different continue why in And to going the play going to mobile VOLTA bring business. always think players new XX-on-XX. about platform. game

Operator

line question the Sachs. from The from Goldman of Ng next Mike comes

Michael Ng

rest the to better and think million understand Are how Sims. Apex the How about your million tracking you're XX% The year? there? the to should throughout of about $XXX you the $XXX bookings against we way guidance Legends you the in did phasing And quarter? much how realize like I'd of for

Blake Jorgensen

early clearly think still, was experimenting; quarters, we quarter, we have said has the as Clearly, remaining two, through content we more QX because in two I much last first and quarter didn't one, that more content. the should that quarter QX, -- expect weeks as [Technical were Well, have content, Difficulty] you to smaller today three will few in going coming will quarters what than are to the and mentioned would talked three We the a that that's than we're build today can should Andrew in you because year event really probably size the all you I August That's a monetization. we assume drive I so QX even all QX, and continue about drive about of know the to tell assume it. continue which major back same than based days and X one the so first that. that quarter. to very into on to larger on month or plan $XXX Season less confident into we're or But everything's Apex. to X for it's million only just on -- month now. million And engagement $XXX better and we're tracking right us, tends

range that our is on called before, live confidence it's out to sure make will we've that want more. franchises live like people as a Sims, to Obviously, understand, business. business our that continue them And in overall grow service relatively to range do didn't and and The Sims around we but people we not alone. run And very to of because but as have us, small based the it's we wanted to in that same remind learn have part been It's of Apex a of to a important $XXX million continually update we Legends Apex service. $XXX you million. still We over building time that we we'll producing revenues continue

we know got amazing engagement. we've But

engaged for That's keep almost on weekly that basis them have and everyday. continue to the game And a XX million playing people any on see. huge we of game. We playing million to us that, we'll X take advantage

Operator

comes Baird. of question next from the Sebastian Your line from Colin

Colin Sebastian

well. as me For

bit. third-party outlook overall. software just of environment the sales, today end more or reengagement comments early some players has specifically wondering Sony And in Apex, them of into for the on of drawn was Was a on some reducing color secondly, from hoping I then with game? little your First, any terms you the some in for made retail environment preorder back their of terms what the what titles in the see

Blake Jorgensen

engagement, Yes. the wants talk you about want. hit Apex to I'll piece. second the Andrew if

Andrew Wilson

shared. Yes. the engaging Blake have is to back I measure. just comments X of games. makes the And between it million come It any basis. on one that just -- a most would this That large XX game in week-by-week people engaging the we to probably million by

which doing at is great that very way are we our continue great to building to this ongoing continued that fan for the time. a to new when And to to of we sentiment set is longevity. we core to the with inside the Respawn And experience. gameplay grow we in that we're think running but know to continue of something a very expect And and see of that out expect the a content that's core be meaningful believe a And Legends, success, us both gameplay with team experience. great great sign that lead to grow continue come. we of and build events, we over engagement long the have possible. involves about see release Apex game. that audience part of We And engagement to today the ongoing business a time of at long-term Again,

Blake Jorgensen

title. about almost think this We an Yes. like annual as

us just and believe managing that hope innovate of I it. in change XX more. that -- how to that's game not have that There's year add to we and so much potential a to we're continue ways that and game. that and there's will potential time over if and game We ahead evolve huge over think to We that run time believe game or that

that reconfirmed any Sony of demand they Sony, our thus, year. the so I titles. terms metrics our news seen the our softness said. We're the reason I And around have full the exactly not don't In know guidance we for seeing around news what in not

Operator

Matthew Your from the next line of question from SunTrust. Thornton comes

Matthew Thornton

and for terms Andrew, you in Blake, one Sims. for about I Apex, quickly. the you talked maybe could about you then for Blake, one talked year, guidepost the if just other of

well. more us around down some quarter I you frontline guidepost think the of unit XX% last XX%, as to mobile a gave couple assumptions

of FIFA and curious how But monetization, about any just Andrew, versus Just how be mode And would through thinking VOLTA should if then, in three just Any impacting engagement? really could quickly ago. changes assumptions there's kind we you're color within that that? of those helpful. about also the there think maybe kind talk months you if

Blake Jorgensen

we've changes about pretty the towards And the all we that the metrics we're provided of that guidance. all consistent on of are the no seen and with We're year. that feeling numbers confident leading start So at it.

Andrew Wilson

meaningful And back them. fans to again, and football go our I across that do bring world do we We platform a of was on in do was platforms. We of different that models. juncture different much football what that there. And FIFA models. opportunity business is through that We will be the a meaningful through that recognized at expect to this we access millions together do do there some see for VOLTA, like is platform that, the see with to playing of and the part experience hard-core community. we FIFA play a football around models earlier And of to comments, really continue lot most to in that hundreds the way we

of But different and richness part the it built Ultimate the of game. inside come we like there when the seen as the community competitive mode, fans more new Team. few a community Journey, did Ultimate of in of esports game to is years have that whole will and Team that into in a ago whole in use ultimately, football I a The fans. we over casual competitive modes attract And started modes now, mode play. put was modes set our move we also we they FIFA style story-based that the time, that new the game, have group typically and And that model we more new a what in and And the of players that motivations in to that become of brings fulfill wanted

VOLTA think about we so And way. that

modes community those Ultimate what over happens Team players growing rather community. is that competitive more as our like aggregate enriched an into not FIFA impact the in of and and on typically, then the but of are So the our And by there esports game long that become be is will term, deeper expectation it grow part that the it, monetization we modes. we become other size move

Operator

of from Hickey question Mike Benchmark. comes from line next Your the

Michael Hickey

the to see driving more of of terms still overall China, couple. and Apex, game, engagement, then, of insulated on I a expanding is a 'XX? was It's in in guess, [indiscernible]? of limit of now mind sort but first, to to in I is move just try terms for the how no-brainer. September, 'XX got another to given profile hopeful this of player I competitive ton esports guess, event in But the feel some of state questions. I've sort it possibility fiscal guess it, be I'll great this in And Apex. of big mean, mobile maybe I in aspects start I esports a is monetization -- maybe add-on, a a to guys Or you of forward terms could of color opportunities your more

Blake Jorgensen

Yes.

one not and Apex quick real in don't our with hit globally working partner talk anything me we I'll Let put mobile for about for because China talk Andrew either in obviously did a that's let and esports. mobile this timing guidance still but assume would more but we more the We are year quarters I a the you go We'll have both evolve, on in assume will but how set right give input would cases. in I that now, as 'XX. as or up, 'XX nothing it's to timing knowledge event annual

Andrew Wilson

phenomenal player successful competition at are esports again, and large community built see and as the And is experience. esports, audience. very, very bases the back in broadly And a has both competition a social most as what titles Apex shooter we the go interaction. global the it unbelievable first-person motivation, are course, where really, again, of social Legends category, game to its very that which of interaction more global On million-strong those really have the has, is core core around I

also featuring competition good appeal teams -- XX later and first to we have had our esport. very our an series application and we'll So about its and a its of events We've feel year. in the

we engagement, engagement than FIFA gaming about about we've Xx competitive players. is talked players and as think higher And Xx as noncompetitive Madden, typically to with again, of

and the well. but it will viewers the engagement as only help and drive fuel So higher attract there, and new our drive is ultimately there existing component higher community new engagement spectators will esports that new expectation not and players

important feel we the be it's very long global So like part of to going a the community term. over

Operator

the question BMO Johnson from of line Capital. Your Gerrick next comes from

Gerrick Johnson

increase year EPS obvious bookings so full basis XXX guess why million, $X.XX, guidance? no I $XX in the by points, gross asked one's by should question be margin by no yet,

Blake Jorgensen

mean a I good Yes. it's question.

if overall that transpires fourth It's in QX, wasn't we've other think or tenure but we than of small it's just once And it's more not, that we'll at do that's probably I enough here. for forecast. we then not how dumped rare it's to just on we -- know, only of don't the basically -- we And that. than almost decide first the part supportive. coming raised no quarter what guidance, much and all change wanted I but in remain it would -- look least phasing out small in conservative you if guidance it real year. still guidance we my quarter, catalog reason such complicated we the that at should any based in a it's our into because the

Gerrick Johnson

what the second? just by for Can outperformed into That XXX basis margin that? Okay. dig I a gross drove points, so

Blake Jorgensen

expected, controlling people try bring Moss, faster team When hard worked that QX be to so we revenue, that led than operate, of by conference different you CTO, down called those they in we've better our around than we this with our of we across example, game tend Apex, to X% than first through playing, I the expensive call. board. and think but growth for remember quarter this can was out how And a our And Apex, our to operating on play actually done earnings we're a we in online we really or The so we to partners to game, games Ken business We have has thought. done have was had costs either and job simply the the digital particularly and across millions cost had started platforms. we continue of full that bigger expected. better higher downloads, So all than digital -- drove stronger year expected continue or it we quarter. of it and

Operator

Your Ray Stochel the Consumer question from line of Edge comes from next Research.

Raymond Stochel

or a do those And make updates? your about than those think have you for content come changes think hit need you players are to content all And Not you're across high Do too drop elevated to prior? how do faster these of just about cadence building, that now? Apex, are expectations what you of but cadence to thinking the expectations days close you expectations?

Andrew Wilson

a and a really question, The think and I single that a certainly every it's lot communities, reality we see of is different. good hear different one we is build for lot. games community

community biggest events in community. that things of in it for communities, that the weekly cadence but and again, to, of content and because flow. continued to terms set a the year sense community, for natural not is game. cadence a as we're makes sense engagement doesn't Some this like community. launch, real Again, we built of great like think and Apex, to release have of world game we've a A a game, it's year, grow that that because franchise it lot that so that The make of have it longer we like competitive course, tie typically a has occur content since at FIFA a its cadence ongoing Sims a is, exist a the If great core, of

a but happen we about about and kick-off series think kind weeks as think of kind months not seasons over that events seasons a onetime of -- we of of that, event, as when as a time. so And

Again, We better we're that over ago. in that to and is on we're as and is better for We terms very which And to the well. we same this Ultimate smarter learn and now, what get feel engaging us. We've time. started players. the true got Ultimate We Apex for that years with It at about how go. Team, FIFA continue better really in now remember, is XX think we'll of X -- launched of And Team Apex. period get small. understanding desires motivations at XXXX. fulfill is Season our expect this good this The of with as tremendous community we business Sims, much over learning with the started where we The

try on engage and we that thing content purely additional make have engagement additional try type at driving content only means feel their a just is avoid as and build experience. furnace games. XX gameplay our that wherever harder of and finding where XX build the games over to we because learned to do ourselves through time. fulfill that But and One events. engagement end years we we're And that with able live and it's model We of very position is longevity that up to a of core, possible we with great then avoid in try and with content over motivations we've service that

Operator

Jeff of Stephens. from next comes the Your Cohen line question from

Jeffrey Cohen

feels franchise Switch. It be would for Thanks on do really that the one would Sims. color on incremental The that Nintendo the well like

any to why So to there? on wouldn't the to? games I'm you want determine curious one that which is game or bring reason And you'd you there platforms bring how guys

Andrew Wilson

of time the things. in play the the profile platform do terms evaluating there? prefer Or think go the looking would a game really appreciate on community we to of does it at or we're fit they platform community conversations, One, of Two, are we else? ecosystem? the somewhere that platform game couple really playing to Any the control would that

an data a make have on choose to on often the even We lot owners PlayStation a enjoy Xbox platforms many though or they Switch very a great also that content of X lot suggest PC have Switch games they a of that and own or play the we great One those a Switch. and a would

that doing basis. never would Sims I Sims And process goes And players. say always Switch, there's evaluation The wouldn't so I really to an but the a we're really, case-by-case go attracting think on well that

platform in in content, As that the million months expect is and X will and creativity we last really players of new customization. the couple that in on Sims a user-generated engage we did brought that said, community promotion to we tailored

Operator

Bernstein. Sanford Your next Todd from question the of Juenger comes line from

Todd Juenger

a at fair question? just from Respawn, Can a little resource investors something just I amount. visit get the bit we It's

obviously is with some that important so being taxed really studio And stuff.

resourced your can either whatever the get leave is, of pulled that. would how did at where the And And effort? I or all broad enough bodies you Wars And say? just that from I Star thoughts any of So to that question. from? effort Legends us why And in Apex dollars It's guess love on come hear did terms or that of to don't on you've got a reassure that? pretty

Andrew Wilson

that would Okay. about a I pieces will better I feedback of question. you few Good offer think feel make life.

that are teams team bespoke ago, fast-paced different first Apex and the of multiple is that worked now has to first-person Duty shooter This had Titanfall, specific many had The there Apex a well. launched at Call type game. is years multiplayer and on a that Legends Respawn, very of teams Legends. team is as Again,

and type of So all Star War, Wars skill about journey team Stig, Fallen this fantasy the a God Order very director had is much led their of completely a single is team The set. who it's on of player a different game Jedi: been particular being by Jedi.

at working And discrete so And well two on third actually have new there's Respawn some they as teams. team a things.

Arts, Electronic also the for central well-suited content. across very the In that a and help we creation scale are and of in art, needed services addition In that group large across engineering company, we where company live a to new the if teams matters have is provide industry. can number design of that, this this have

combination inside we the art player Respawn and are the the individual individually global have sustain about of good global that very games of EA so staffed feel the engineering, that mind needs across teams to And our and base. scale ability resources in their our central of help specific we very, with to and

Blake Jorgensen

do development so if from Respawn so. We've to provide resources also to Respawn teams -- as to do outside on wishes wish pulled they them of

example. have for DICE a team LA, large in We

tried able to middle in have a as do what we've We as Vancouver. organization long a our is of the be large well to in live And distance services perfect team to studio. work

given resources to and relative very, resources pull they're on the conscious they -- want. very And use And no we've what to they the effectively game to opportunity built so them they've very shortage the they that, need. how best there's they any sure resources to do but make about of

Operator

Your UBS. next from Eric of from the line comes question Sheridan

Eric Sheridan

picture big question. another Maybe

you and shift term long and goal console medium-term think those that do you versus on industry execute could company cloud-based also how the next year inside on models, both distribution against where and think maybe transitions? As towards trying medium allocating how to about more services the aligning cycle longer-term through the the go you're shorter resources to subscription resources against to about another you transition assets think

Andrew Wilson

Another good question.

diligence and that our organization that will games. would model great be I it so the continue and down or they doesn't our to the business have or games. ensure studio the And start great is And teams across to working focus model. everything medium-term matter matters need long-term. our with great distribution we to build are with what near-term, platform build doubling What we And

also Ken future position. the to and is we our Moss, what find with the company to the out that, we're CTO, about ourselves again, for of scale ensure of ago, some leadership talked we've Atlas addition given of Project In investing don't and this months

ago. in invest to started years we our five digital company, over a As platform

players system or of carries I developer a only regardless publisher unique think with game platform the on. we're play that still with our they ID

We and single security in platform data and types scheme infrastructure company these transaction of things. single have engine data the across a and and

we for working been on this that we've So to years the model future. ready for of some ensure number are

about again, organizational think of cloud subscription. about structure We've we and really out as small us that learning been around Israel went gave start a out working bought how cloud in subscription, a an company -- head think Now, we on we we fabric.

future And feel there. really so we good about our

end we great games. day, of But the making focused at continue on the to be

the continue and games technology that and We deliver we -- will games have backbone there when Apex of FIFA in the seen great Madden and like but Legends, ready. we we expect and value to that ensure The and the have Sims industry great is games

Blake Jorgensen

Yes.

think obviously been tests learning way. the I we've and doing along

Andrew earlier, Microsoft. each the but the have So out gotten from we importantly, as because a understand EA easier Obviously, started on and just on what we of on then, Origin. on learned We've lot that. with more our we rolled wants. out mentioned Sony. technology those And rolled And rollouts Access consumer better, subscription easier

muscle it more the company of so the becomes from start memory scratch. of a versus And initiative having to new

We're working hard X. next moving on Gen on games -- building for year

obvious. I think it's

is industry that. doing I everybody think the in

ready has all about come happened the it game time. on it X. Madden, when and the As some not but Gen the Madden be when X very probably past, been working Gen we'll ships, out games X obviously, out like for itself X immediately. with excited on console you'd games And Gen Gen in bring we've ships, on not We're

Operator

from question next Jefferies. line Your from comes Alex the Giaimo of

Alexander Giaimo

mobile on the looks some strategy. overall thoughts updated your mobile get lot can of a we know is that bookings another XX% the if to of like down It curious just year-over-year. titles. was I due aging were legacy I

all a provide this So on there, sense? maybe of then seeing developers smaller where might make the mobile And what color some there. is out with just M&A sector you're

Andrew Wilson

Yes. strategy A from the material of either good quarters. over shift and not question our had a we've last -- couple stated

pretty to and over revenue X games in it's a decline seen competitive extraordinarily continue profile, we've part also the It's a industry but XX grow. and of to tough months. we companies very meaningful last very of I mobile mobile contribution, see large-scale of think it's and the lot serious the mobile the

We operating mobile business still have XX%. an has a of contribution that

profitable that. to about that And we mobile good very So feel very, very we've it's as and held a on business.

and service talk harder as if have But harder break our we're I to games in One and in about games and of strategy, those what think it's mode, in. seeing on it would is is that titles we scale actually mobile the older the getting categories. top age some is about average we three tremendous live core

globally, games community. grow like services So live look Heroes very we're of -- Wars: about when fulfilling really you have feel filling or the ensure ability over to Madden Star and that Mobile FIFA Galaxy or good those our to hard that work we time at we

times, the has The really really second is, where a it's that We're is we hard really is should IP world Zombies, like expect to charts. and candidate we out And really, players acquisition downloaded has on again, think break we inside that a community, believe that element in focus into is what there. our absolutely new billion our break in vs. of over that is acquisition can and market. you focusing been otherwise we real Plants mobile tough resonance X that are of IP a the on will very which costly

the And have There break companies we then to that into build of maybe games the right. out players or how are for I there third, the certainly could they I and capacity don't have easy great of who opportunity the you objectives. a an M&A accelerate some we marketing an firepower there mobile of access. senior but might to number their think market are some to actually players smaller path, think that's different about a otherwise talking over that think be will time. number have there but And don't out we're network I

Blake Jorgensen

Yes.

and the Zombies they're high about for a large. largest including global we you for mentioned, priorities new our very super I And high for had to have Plants we'll going us. games. and on priority mean vs. priority Apex If FIFA globally us; a as game, And think China, that's clearly, because talked priorities, we Madden FIFA, of two is mobile, about it opportunity high a as remain earlier,

of we're there so do lot and spending a we'll to And time that. continue

Operator

question line next Clay comes Griffin Bank. Your the from Deutsche from of

Clayton Griffin

follow-up Any terms what you're if to want get coming those Microsoft EA of you and know Blake, of of there engage there, in what to with but on what can talked in I -- with we willingness seeing about seeing behavior. Sony, on terms Access on helpful. days update I services an you're just on early user just live platforms. it's out learnings color be relative would

Blake Jorgensen

did their much what before all many they that what they because mean ended twice and saw the up that's as the pretty games you no-brainer is kind which has platforms would I across first joined true of is people a stayed service, we longer, of that game a as almost didn't people playing Netflix find Yes. say, on a they the a a others we But games trial found or that also meaning they see, really or lot you've typically some Spotify of essentially. know played enjoy about. because they playing friction of reduced that

get didn't think they're spend that that to getting aspects in are they wanted then before helps Team, know they just be for they play And on of it which discovery on they a the might And deeply subscription they where part engaged has free sometimes things willing them, behavior where of a people the so to if And into found did oftentimes spend service and and it. went a goes service. service money more live they and to it's -- they Ultimate like they than lot. start it in something

trying And getting that's that on of the stayed and learn to of didn't want across true trial platforms. value know in things to an didn't so by money to to or start friction amazing they giving a games spend we're about to subscription, see them reduce and new the all economic

is don't will people that do rate manage a how curate time subscriptions the we've within been you've over subscription stay dropping at any to content piece going fairly the into is the churn one so were got And and you trying wrestle in of necessarily And to content in about content other in. how predictable by you And fill how where change don't we're the might time match thinking third-party subscriptions. we games help to that content to to bringing they're we because do terms in have over have developed quarter. even every better places

we're have to in more really come, you a but position. So good

because any We service base a subscribers experience a the I of that. have long than more industry better lot think other in and by shot

Operator

from from last of the line Stanley. Your Morgan Brian comes Nowak question

Brian Nowak

I have two.

budget just is that. about of attributed investors what idea be earlier questions, kind of going could percentage would head you an from bit the get what the Can toward headcount the resource sort for in and little about overall you of of bit is free-to-play to a beyond? or and us R&D NBA so pipeline The of the the new second couple little a back potential talk first allocation, a IP just franchises potentially thoughts that on one talked one Eric. about to new philosophical Live, we going as one, kind on XXXX into And then being

Blake Jorgensen

a team have developed new say, don't rough we one? versus XX% a and do as also games IP? IP new -- VOLTA that I'll always we're was because are you as But it you of XXXX you up a of that that to game. mixed where game there teams, scale until may we're the developing don't couple and be generate where Why when call of part example. to before. gameplay a it's mentioned, Andrew this But teams as We try an well place kind IP We thinking where didn't scratch And first be That's that but take balance do question. small sure would ideate the new ready with way. years start 'XX we're think status for that 'XX, build of Anthem, you NBA make FIFA really inside I allocation, it's that to and that modes, about as brand-new 'XX mix. between you fiscal group our we're but both and but evolving from to a exist we with the it evolved internally, to like concepts, R&D we've try of way budget. stand-alone the do -- comfortable always get or out, for the product people We a may working on, probably hard certainly let it and games with I a for starting it our

Andrew Wilson

to time. On -- some this share but Yes. have anything at we but seen NBA, around we've free-to-play, speculation don't

Our hard. working game been has team

SPORTS the partners, company NBA better basketball to and excited brand, market bring and to we'll our and as NBA the remain getting and to game committed an XX And Players better our Association. Live and a be NBA we keeps every EA soon. year, As

Blake Jorgensen

we'll talk We'll interest. your we everyone the Appreciate at you thank Well, also Thanks. And talk right. the as you, earnings All during quarter the see you around everyone. either next call. quarter country. to to all

Andrew Wilson

Thank you.

Operator

conference today's concludes This call.

disconnect. now may You

Electronic Arts (EA) 30 Jul 192020 Q1 Earnings call transcript