EA - Earnings call transcript Q3 2020

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Operator

Good afternoon. My name is Chantal and I'll be your conference operator today. At this time, I would like to welcome everyone to the Electronic Arts Q3 Fiscal 2020 Earnings Conference Call.

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

Chris Evenden

Chantal. Thanks, third earnings EA's fiscal quarter to call. XXXX Welcome today Wilson, COO our me CFO. 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've addition, prepared posted accompany to In our slides remarks. earnings

we to call, our post XXXX. QX call XXXX our of calendar, the audio and a is prepared financial earnings Tuesday, Xth, call, our our after model and May scheduled transcript. replay will Lastly, remarks this With the for regards fiscal

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

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

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

Andrew Wilson

X, for Thanks, services new FIFA, Chris. Electronic our Madden Order, delivered Fallen season. over an Apex outstanding depth we quarter Star the Jedi: unmatched to live Arts, players third NFL, games and for It was excellent with Wars the and as Sims holiday The like as dynamic breadth Legends well

the post against very for earnings track XXXX. full raising the we fiscal guidance, result, above significantly projections FY revenue year second year-over-year our a our to year this our and for on a and were We're year QX time are our strong original As guidance for for quarter. growing

great players IP experiences live to in channels, the breadth delivered our games are we're more popular highest reflects most growing portfolio to more performing a in focus more games, our distribution love. quality we they deep and new strength on of execution. players business, the We're so and with our connect QX our and we industry commitment to services and the can the What among expanding to

players scores and our building areas engaged in of result, are in a business. on highlights are strong the sentiment momentum we a games, here. top As our are I'll touch few deeply growth

adventure Star of never games portfolio this looking been Fallen all Jedi: for were fans Wars has season. Wars holiday Our action stronger. platforms game across Order was Star that the

that players, Respawn the delivered projections an gameplay thrilled expertly of lists sold made and game quarter. outstanding of many the for crafted with year our high-quality experience the beyond

Wars In the quality II addition the Star well. to shining Fallen Order, through is Battlefront of as Jedi: experience

updates Two sentiment high game spanning Edition significantly exceptional the all player years and Celebration re-reviewed II was later, and above dozens scores, of expectations. and that have QX to performance three the to critics helped drive our more, content Battlefront trilogies is at

across generations our to Our well. grow and both communities look Disney Republic Star continues and and Wars: Star as and Old Wars: momentum geographies of are thriving Wars Star to endure forward franchise the of Heroes with The Lucasfilm. continuing Galaxy The power in and we

our and It's example of storm a and are new community. outstanding opportunity innovation content an nearly portfolio. regular continued by coming Legends the since is of industry the live we global Apex strength this Apex the at Seasons grow. one with for of year and to cadence IP the growing took across service

we and into users. in peaks continually challenges season daily three seasons was that are events engaging Season higher two, experience. imagination creativity show with active are those in-game and pouring than players with Within the bigger that content the

We're watch. play and to more ways also Apex the expanding universe with

community networks a Apex broadcast partnering Legends Lenovo Gillette, brands our portfolio. for there's sponsor plans to Pizza now with in for the esports global an esports pleased FY gaming as Snickers, that platforms series lot excitement have more the major have and to us and Apex and other competitive on XXXX joining official reach underway. in We is of We're Hut

great and Madden EA both net for successful and bookings SPORTS the quarter. our XX Madden franchise, It's exciting records through for been fresh player sports around year NFL XX a multiple and XX most established world. fans can setting be in ever alike. a game the our NFL highest the games for how demonstrating engagement and holiday is FIFA are new

the have to grew Our fight dimension to XX% QX. deeply also franchise up through Team XX matches FIFA for an and updates Ultimate launch new with nearly engaging all year-over-year FIFA been FIFA year-over-year QX. in brought from VOLTA Football fans

the also a our XX American global new our launch club most to tournaments subscription FIFA FIFA series CONMEBOL expansion E-Libertadores now as to getting services. additions in South to title FIFA with We're one number the and experience is XX well major two engaged a esports XX as the CONMEBOL competitions. Sudamericana ready prestigious Libertadores

to QX. year-over-year FIFA South up Asia another is FIFA in growth significantly addition market our In online with for America, franchise

we other worldwide X Sims XX have In life-to-date. portfolio, than The our now more in of dimensions players million unique

our expansion game for we amazing the Sims the pack ways Discover eighth can add this University demonstrate to Our experience community. to continue creative for

the the to and brought the fun both for for series As holidays. child world. Disney+ new did around of Need before fans Neighborville Mandalorian Heat on Speed the the Battle Meanwhile surprise and PvZ: addition just from experiences

deliver greatest us the breadth has resource how are been around and world demonstration expertise Arts to an teams of a Electronic players. our of this of at unmatched together and year technical our working entertainment creativity allows people to Our the

growth more in the games come. world in IP for through our to great some the addition and excited we're ahead titles and and Star Apex and more Need fans and surprises experiences indie to recognize that around to to Sims own do to Madden more, with to is vital to FIFA play. year also of that partner content the Speed we new to The love Wars, have From of

players growth business. services continuing our for for delivering and Live value are

characters, among content events experience expand With creative the updates teams on player to is services content and to continue its seasons for in and choice and the that Ultimate new content the in-game Team, continues in Our mobile X will live are industry in players. QX add expand game and a our more Apex focus that around key enhance building and new year us in world, and Legends for and The to top constantly ahead. across growth best it feedback original the in driver Sims titles the the be

new and our we're services IP of live the for the diversifies growth forms content. of into With well-positioned as and audience strength expands

games including regions to growth mobile Asia bringing our and IP in We launch in Legends new to are Apex China. continued plans and

to new FIFA and Apex XXXX. into for continuing year platforms esports next Legends our we FY the into grow global We're With the our available as now And and we're we're fiscal competition leadership forward services to and leading move low plans stage looking to friction high-value year. players. to bringing content expanding Steam growth three XXXX, FY on esports our Madden and delivering more strong, in in continuing properties, exciting this have subscription players, with subscriptions in major coming as for for we finishing

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

Blake Jorgensen

brings of Launching undertaking, Speed of games calendar last Fallen is major Zombies: eight. launched course, story. in Order. Thanks Wars That total quality that number vs. games Andrew. XXXX Plants the the Jedi: for a quarter: Neighborville; successfully only Star Battle to at a Need part EA substantial for three and year eight Heat; but for tells

in new theater a whole example V, more Battlefield engagement. and weapons, vehicles, of major launched shift we a For with maps, war driving

Star Wars we across For eras. game-changing introduced II, new exotic heroes, cinematic epic to play planets, fan favorite Battlefront reinforcements, and ways three

Teams the a in testifies legends, in-game and particular. across a the seasons which events, whole record bookings six Ultimate we three teams three are Madden works; including in Delivering map great how company quarter the to quality aligned well it new FIFA And new entertainment Legends, as game of five to new and with town our For we content this services Apex net achieve live and unite at and modes. of launched in had and three takeovers, another whole goals. we way level

the a with Wars and Apex delivered Order. fantastic Star Legends Jedi: hit we Fallen season is having a of launch new

cash result, last the a months. we record flow over XX As generated operating

$X.XXX in earnings EA's resulted billion million were expenses $X.XX, per was and operating million. net revenue was better share and $XXX $XXX than of $X.XX GAAP income operating guidance. our

the driven positive There true-up depending we plan. The combined and this year-on-year largely growth to in swing QX negative performance Remember was in development. million $XX up continue last against as year true-up game flexes by increase year was in invest variable creates OpEx a underlying that on a year-on-year. with in also compensation that which R&D company down was

a XX were million expenditures slides up billion, $X.XXX for was quarter billion. this year. at our record the cash Capital flow $X.XXX further See information. trailing billion. $XX in million for for flow cash was flow quarter the details the earnings Operating cash free of Operating $X.XXX $XXX a last on months resulting for

a shareholders in the buyback $X $XXX million. returned X.X now we two-year at May that million During program over in $X.X XXXX. shares the cost of repurchased we began of quarter, to We've billion billion our

plans future announce our will call. We on earnings May our

despite end $X.XXX Our the were net a XX% headwind. on the billion, Total cash were quarter FX of million investments up and billion. at year quarter prior for bookings the short-term $X.X $XX the

and a the best history. forecast delivering had fiscal in million strong for Order Madden's third end Wars Jedi: that smaller X anticipate Madden single-player X the later Star portfolio, NFL performance the for discounts the in but million in applied very strong our and in selling game. units million We XX-year of is than more to prices expectations. hit around now across were year, with year, we year. selling significantly result of action Sales Average fiscal XX to a units the high the Fallen XX beat the quarter

XX% net live the business net net net $X.XXX XX% billion, of digital year model million. services Digital of XX% year. into trailing XX-month were bookings compares ago Diving This of Live high. bookings changing is up and a bookings. $XXX represent million up to like all-time period. the in prior business on the to an XX% illustrates basis. bookings service our $XXX now growth the on nature Nothing our Digital our were

online strong. and titles Growth $XXX of particularly led expectations, million, in FIFA followed but Growth X% our by Ultimate double-digit delivered driven Madden Asia breadth FIFA but also was by Team. in portfolio, bookings was Mobile year-over-year net Apex across growth the Asia. down extremely our above Legends, of by in closely in

Including one Alert mobile the about excited Conquer: in opportunities deals, in up at such China, Red incubation the in promising our constant we for many for ahead currency. & mobile are year-on-year Command titles With is as EA, IP-licensed the at market. us

million, One $XXX higher digital year. Growth game of Full game the plus sales, through than our of physical, bookings XX% and downloads shift XX PC by console measured months. and XX% than increased on to to generated Xbox net year ongoing units X was were a the PlayStation over last compares XX% driven last Overall, digital. ago. rather This sold

annual percentage of model growth around to underlying continue X digital. for We points

Turning to expect per $X.XXX to and we earnings GAAP full $X.XX. share net to diluted be revenue year for be guidance, billion

$X.XXX We expect billion. operating cash flow of about

anticipate of million, of the the capital were to would above where start billion, which $XXX $X.XXX continue about free We flow deliver our $XXX cash around expectations million year. of expenditures at

of net year. $XX $X.XX million $XX prior over up We XXXX from million up fiscal our now bookings and where started we guidance anticipate the billion,

of revenue net of revenue operating expect we $X.XXX of quarter, cost to be million. fourth and expenses $XXX billion, the $XXX million For

and count reflecting is results using million launched in $X.XX year. net XXX for we launch year, the down of anticipate strength the be Apex billion. This We Legends year-on-year with of for the This share fourth slightly two is by last new per quarter shares. quarter for the last a bookings quarter, the year. broad-based year-on-year, $X.XXX share offset IPs earnings down to diluted this diluted massive OpEx Anthem

breadth of smaller followed including of titles IP goal in launching fiscal sports publish even platforms. titles bookings of be new Madden by to four as blockbuster our globally the FIFA titles also services forward the we our broad underlying across Looking our to new franchises; continue games four anticipate four invest the We're from in we'll is our and genres. driver, range net live launch developers. growth and from other and profitability, primary XXXX, We to that new grow draw content to

into we soft mobile Finally two new it expect make to titles launch.

plus We new XX of of titles. XXXX on leveraged in with XX expect FIFA NFL growing Battlefield. and of next-generation consoles other fiscal launches the the and accelerate growth Madden and base a the top to of services we as This new ongoing launch is live

content broad-based of players. live We shareholders financial new titles, expanding constant our create reduces individual for quality through long-term value reach. risks us decreases high dependency by growing enables a our on our results to launching and deliver our model This and for strong entertainment services, stream

Now I'll to hand back to Andrew offer the some call final thoughts.

Andrew Wilson

and Blake. for business players our our delivering Thanks is We're growing.

excites with Wars new Order Our and foundation Star in engages great that added of franchise our ongoing portfolio helping and the is players. and grow great of innovation Fallen our player base. us millions IP breadth Madden our FIFA, Jedi: and depth of like We've total the games reach and hundreds fans is

creating experience looking FY IP, players and indie amazing new XXXX partner new more other extend enhance beyond. top services the for We're franchises, with to share delivering games our and where Live We and forward to our months and design for in surprises from longevity, friends favorite for in titles some and for growth business. come. enables players our games ongoing love experiences compete years to their communities strong and connect,

services Legends, to Apex live more content Team, Our events throughout great in-game year EA communities Sims in will those for more the X, continue grow and ahead. Wars creative to Star engagement bring The player and Ultimate and SPORTS

Great well areas. games position in live us strength and additional services also in growth

New consoles titles. top and to be leave our with we'll some are ready of coming

will growing content to of with expand and Our franchises esports portfolio audience a this wide sponsors. designed four year for range a

geographies of them industry distribution with play of and more great they entertainment audiences to to the offerings, It's can't time to to exciting around and more value play. in players bringing add an games interactive subscription through a that the continue in growth more to making reaching We IP to amazing expanding the our more world. wait time channels and be

are and your here Blake for questions. Now I

Operator

with go from Oppenheimer Your Uerkwitz Company. Please ahead. [Operator first Instructions] Andrew question comes &

Andrew Uerkwitz

gentlemen taking for Thanks, the question.

numbers massive shaped two live on the future the focus we games, design past one's roughly big next like got one player. Star but one the same a Looking was How Wars initially one console single that the with doesn't. Seems obviously at game sales into you big a was head has multiplayer; about way a services, as think live services? are

Andrew Wilson

why reason do the breadth depth question. Great this as portfolio have base grow, because so And their our part motivations. to the of we in player is and continues

social the the that games, Jedi and part making important understand play; things. escape really to about have think is the of while what story. Jedi As all large social through is each And as quarter a inspiration fan motivations journey, their Star the start competition and why Wars we've connection, these motivations. interaction that of for a living come that it's within to last multiplayer broader want build to self-improvement it at really, that model creation, base. we fan needs with we to and satisfy what And think is is really we particularly of we And also types about think and base, we that big we're of people seen the the inspiration, looking cohorts escape, experiences look base player about

imagine a As player you breadth with we and basis, in of the needs motivations depth order go-forward think about across to that the meet broad will that we on and the IP base. this should continue

Andrew Uerkwitz

just could And follow-up. one if I ask

a easier -- Should eight hopefully three, expect than eight out services, about or we like kind more to when As years we number? launch more EA four, of cheaper we also channels good distribution five is live but look more think marketing. is games

Andrew Wilson

start would lot. by saying a is I eight

companies at not kind that that together kind across that you that there with of launches execution. can and come strength of breadth the industry, the about think of If quality many launch various are game

we about so really number. good And that feel

understand effect. thing other layering is that's The also important to this has a

in one, as is the and the live two, stream really our in longevity strong. that games that last and and have time some predictability launch five get So, years, and revenue cases, we services four three, we build that really, over

think a I probably is pretty number. eight so good And

we Some good. few really few a that, a more it feel but less that, years some be than there be of might might

that this coming third-parties we our network other now to is subscriptions speak The thing and have with ability have the reach starting players other a low-friction business high-value lot us and that to reach the that in with we and model, power of with we're to see distribution of content. about Indies their

industry, And these and so more player also potentially to really good reach interesting many execute to third-party our Indie I high-quality the content great others and titles with feel to about in capacity deliver base very from the have and while our continue going new to we're developers. and than opportunity

Blake Jorgensen

I would games three of of maybe one or And remember the years is games business year's major what games, And just on or catalog Andrew's deep ago. year's not a is this Yes. but catalog. is from last comment our or deep to based add strengths four a even two

And very billion fans year. sometimes have brands games a direct see the critical which of continuing in at bench it profitable. powerful following I'm That's levels we value in to that in the built. we're about come It's And maintain will we many not of as very deep different either catalog of us. something sales north through that $X the or And sure And thinking the is into is about that value subscriptions. think always overall people creates lot business. purchase through to

Andrew Uerkwitz

Got and on Thanks congrats gentlemen quarter. the it.

Blake Jorgensen

Thanks.

Chris Evenden

question? Next

Operator

with next Brian Stanley. Morgan Your question Nowak comes from

open. Your line is

Matt Cost

Congrats on taking quarter Hi the thanks and for guys, it's for on Matt Brian. question. the

seen what potentially you're partnering you're business. made and the talk thoughts like having any strategy growing some and Can just Thank seeing seems progress, mobile you. maybe terms Asia. on you following Atlas? some with app year-on-year. quickly you have business of update that currency could constant particularly in on about on that going like of is just recently like then competitors mobile success the other in markets of in The It developers if first And some your obviously, great one Project you an sort on

Blake Jorgensen

Yes.

partner we're that as that there upside rolling us to excited out -- globe. China, we've prepared on a obviously, a partner come but about mobile And you -- in develop of helping working us. a we're and That very in for big a opportunity. mobile partner. And today the the is need well, So, that's to more terms with Apex for in also timing, we're have said the remarks also

built next not into that, is have do our a that We always lot opportunity the a believe timing on forecast lot we there. for year uncertain. because there's But of

we'll version of But partner. Obviously, same that PC through partners we also a use possible. in will selectively where Apex do China

We ourselves, market we have partners. time will necessarily continue in might ability some come games. market, great don't to other possible, where partner more markets we to on and Apex or the studios. China, we to great build to us increase We like where fit a have to any can can use either go the that think where But help in And that. titles

Andrew Wilson

calls level that. best-of-breed thoughts. real not previous some a couple that talked kind that the a of the the other a we mobile inside of strategy focus first that an about belief going may have games to had and We've on be were at underlying industry monetizing of Just were mobile, our in a around being pillar three-pronged we

that broader into titles we the see well the the content brought you working has get haven't tell you pay mobile And the of focus to creation company. our continue and content. are philosophy changing out in been in team leaders really should monetization on. coming from think maybe industry area that mobile and more that teams actually around as an the and really about existing studio expect I They that of to we'll performed our out. just starting we're we And marketplace focused compelling a would in compelling really and of really, the some with how and leadership high-powered

pillar The second a are been development has company. -- we game

as I'm appeal be next mobile very mobile Two a remarks, will others there actually has soft have excited some get said that in and about. development might that or we little prepared application. that we number in IP into and spectacular as well. mobile earlier the have go titles so And launch We a which, in of the in of year

those we're continue we third, not to at every then we're to and in out, as lot conversation. acquisition. And make but there it out sure for partnership look opportunities turns a trying that of There's

do believe So -- focus mobile opportunity we for there's we continues be a growth to a do us ahead. and

Blake Jorgensen

as the of are continue conversations Project On Atlas, use where more about the in other the can in and your the that with us it's that connection tight Atlas. and you'll inside from streaming. put very potential, as how We're of well Yes. and going streaming about improve question, to of continue that place. doing the we part components We're other excited we all subscription of people players hear models to tools

play So wherever a level every we great we're them with. to consumers, on simple reminder, to at our platform goal is them products our to can offer quality comfortable that as as provide long to play a they and -- be want

you're going and hear lot year. more next see a the coming in to So

Matt Cost

you. Thank

Operator

Research. from with Your next question Raymond Edge Consumer comes Stochel

Your line open. is

Raymond Stochel

can for be up And like-for-like give that Ultimate would us far then, more my double Great. driving that VOLTA. on monetization Thanks you call. Can far as on digits launch? as Is growth? there update for being so anything details much as VOLTA. Thanks. you an Is this question. Team then, any discuss what taking as first that FIFA And

Andrew Wilson

with new We're very and VOLTA. whole ways. them new in interesting in set engage happy of a VOLTA and brought players

follow. As past we about really engagement monetization lot building calls, we've building we about a think first in about as think to live and services, also talked

that VOLTA we'll from services. build year team is that I great taken They've and strong. the did what really, to on a monetization, and that experience opportunity community to enhance years feedback would the feedback they've the any in to say, And do some way VOLTA a I continue this with yet lot from while on like with other received really think they don't in they As see to player the we live learning come. also is have that announcements extend of

bring. about we're that might So excited what

Blake Jorgensen

I would other our need we on refine and to is and the is this is improve FIFA, on Madden Team Ultimate play. what that we're that games. say Team is thing remember Ultimate The continue on weekly or this NHL not and and monthly Team And bring people to you this running just events into Ultimate

People won't play not having they fun. Ultimate if Team are

do all able that services. it's for that existing And to across you across so the team social that either sometimes Team create It's comes drives Ultimate do design I in our it's monetization. all to refining And about and and is get going the our And every And events come understand thing not of key what people really they're live and fun and that's when sports. new you build an enjoy continues think monetization of it's or how It's interacting. with live people how that's that what event it drives adding really all better and and to have competition social year be don't fun the the of to a competing about the the others. overall events. about network connection that in events better services to that

Chris Evenden

question. Next

Operator

with Johnson question from BMO Markets. next Gerrick Capital comes Your

line open. Your is

Gerrick Johnson

afternoon. questions. Hey, good Two

to year update you titles? also us any other that with you to guidance have that First gross for, could did on margin. last this and And the then you. from year? provide titles guidance bridge Thank takes, the those for Maybe puts the

Blake Jorgensen

Yeah.

to We gross royalty we had on it's Star gets good overall obviously So pay margin. business really more take because of so gross three profitability business. royalty problem driving we day Wars those have. of sold the to Madden, them. I'd margin's more the that are FIFA Jedi expected. more in booked That's and simple. a long, Royalty all the properties, and And than all

So that. than straightforward. more It's nothing pretty

of people next think new news to else. I don't tried sense some have Obviously year give what for we like. on any looks we've anything guidance

in of said top bottom our following to and we've knowledge have to bottom to and next a guidance for remarks, the we Battlefield's as also I said a we would year that. the As growth as my slate to provided should prepared go like forward. people as goal do both that strong -- cash up also growth, think drive is line the set line line And plan flow we've positive big year for which we to coming line And the a year. continued see that, drive top after that we try properties we've

Gerrick Johnson

Okay. Thank you.

Operator

comes Your from with Jefferies. Giaimo next question Alex

open. Your is line

Alex Giaimo

Hey that question. bogged getting broadly bit a investors F Apex for XXXX aspirations the for the Hoping into guys. to into specifically dig without how growth Thanks taking too aspirations thinking more should F franchise. down guide the about XXXX or be

of broader more Apex hoping Thanks. the a just whole. of the profitability as as bit you modest moving how the early, we given think about I compares can think sort us but as EA a update mentioned of that a you've free-to-play then on obviously it's of grower is straight-line profitability past in the you it it it just forward view And a and game or nature lumpy? XX-year franchise should that to

Blake Jorgensen

I our as amazing into an one-year is. has we're where with questions. in in add content excitement play them game an innovate also wanted and to try incredibly job it's to surprise. anniversary think which the I continue Yes, and give and just good audience to said team game feed getting and they that been of things and mean is done The them to the to Andrew very leverage continuing fantastic. game the engaged We've pleased

done live will with than different continue services. journey no We we've that

talent, our team Ultimate incredible for new grow years ago. over I also continued sometimes with and XX on the to And just And thinking an their was there. efforts try the be live done. goal is that's out forget but great mean always to people Apex. bolster rewarded -- new time the existing make about service million we're team You it's job improving business business the sure focused that Team an building they're they've business talent, we've and very like how innovating is $X how and to to

to us predict. for hard It's

you our have when to If is still some we'll sense ago, probably we know, a guidance, to of our don't asked try to goal ago, month But wouldn't have we would but maintain. and to it. known us and grow six some business come May people to that give we months continue

any we're we you give numbers try just that signaling as to that make you're We optimistic to anyone that with we're going where opportunities anyone What can. years something about it's doing sure We sense. if very and We half got make don't do active about to go users very hold information, sense we a sure information. to best quarter don't realized go I questions away trying want we are -- not not I'm we're guidance not the want the not business. very necessarily a or investors. will the at to for excited to where weekly said, think history talking that ago And we're Apex. but first grow to back what we as take anything. to monthly or that my daily And because and they stop with long seven back can metrics more come it, I can and with make company We'll

Andrew Wilson

look CS: to the Go, players things Just the engage around Legends, of populations games decade add. more, world. huge like or we continue a X that things to and At League lasted a like a small things as have like DOTA actually level, industry game of the at

very, a pillars was and of skill-based and plan have belief core emerge better after over really our compelling gets Season fact evolve There's game. in are and that than game it's competitive geographies we at really by to kind that world, players. again, They about very highly time and Season those again X three better needs year we team the of identifiable compelling had as Apex ahead truly we're tent exactly of predict said, and social X. excited continues bigger to the that better but games; characters, we get and Blake and the how think the the the as answering year and grow, to poles year three and of is continue encouraged the add will hard players that Legends we core new as growth the as -- next and new platforms, what

what We expect about come. again will we're excited and X grow Season will

Blake Jorgensen

in And is lasts the mentioned we're to many, you long day, bust. And build for design boom the term doesn't have At -- that's how would much business. trying a comments and the that not years -- to around, a trying something franchise. the rather our we're past Yes. of many end we

if it The an team shooter that's with aligned of We turn into And franchises. the is annual as us can think company. overall that. value essentially part for our very to huge

it. we how that's how everyone's approaching think around and we're aligned and So to come. we're it And at more that looking

Alex Giaimo

guys. Thanks,

Chris Evenden

Thanks.

Next question?

Operator

with comes Jeff question Stephens. next Cohen from Your

is line Your open.

Jeff Cohen

has talk trended taking for guys. the about how talk origin products? question. how about to And churn your broadly, was Order subscribers just, a Hey, Thanks of big Fallen for within you driver new Could can you subscription Jedi: then, access?

Blake Jorgensen

Yes.

the gets that titles. remember its subscription part Microsoft but Which access in overall only it it, or early that program. the is model the Sony of So days. and Obviously, not added origin it's to premier frontline

they're out, to came playing hard it's game. because still people and in understand the went then So if

every because seen coming for in It's our We a have been big have changes portfolio. from month in don't single churn. big not question we titles us,

Origin wonder on the going But always it's you're churn. partners. So we're as grow -- well our to to as subscription business continuing about on

in. drives most the content, we added is that out we're people the that come months people we we is, what that important And from in. part in for new bring put which -- believe be And still now, -- will think found subscription, actually in will also titles. sure Jedi time we any Even regular when certain we've people

We data we know they this before playing because joined and watch titles play out never we a after. And that they've the subscription played before then the them and start lot. find they

build they've sports genres never increases interest games. in to their into games people it or they reduced a playing the as to actually try just we've because or the So chance to don't growth great the get the either subscription. They win, huge we played game, start new, a have of of buy only that's go And it inside that before, barrier trial. and

Jeff Cohen

Thanks, Blake. quarter. Congrats on the

Blake Jorgensen

Thanks.

Operator

Your next with question SunTrust. Thornton from Matthew comes

open. is line Your

Matthew Thornton

question. to the we relative maybe more out Thanks, a I taking even call coming about maybe, you maybe for in to about points titles are to that update those ago getting ending there specific Are for us kind the just those Thanks $XXX you're studios. back the color feeling million guys. year. to little where talked give had Without months particular, helpful. would any Hey, Blake, the specifically, into dates pipeline, of on Any and there or franchises? how those it, XX X, million Apex Sims think, were across reasonable the franchises that doing, products then, for be And $XXX still guys. just various

Blake Jorgensen

doing people an the Yes. is continues say, franchises people definitely for fall that behavior as more those by social excitement and to history amazing come pack the those and More are the would points well. inside with they're what we'll network expansion they're And And well. around reasonable an gain The packs extremely see in. -- grow, it franchise that on build that more packs. new similar in well network. and expansion has we've packs though Sims and from The come social added to both done it season go And seeing expansion do backwards expansion that just then people in just I continue it's more as Apex to and Sims. created as and each builds even not around effectively by start business

as franchises bottom line get set that -- should some as years. want in haven't growing one very announced. line for and fairly give yet we as pretty things titles both games have that we've to add focused year sports in next looking. earlier, next we've well sports No year just future we're extensive you But to will on Obviously third-party a forward And also said be people to our likely we least top come obviously, most games forward. of going assume new will year in famous base on continued add new and on the every said that that associated continue on comfortable services we some will yet with working of can that the set and we'd more future and we're year. of of the And, we But lot color got a I game. sense people at Obviously going the a have couple following we'll a both year, those. that all live plus we're next franchises

Andrew Wilson

Yeah.

a high-quality number teams content. add benefit large again kind of with that, Just delivering an we studios track well-established to as from of very great a a with history of really

in BioWare studios think and we Motive Respawn, there studios and titles all SPORTS our as development of and about stages Maxis DICE EA and and more. across of those and various So are

I also now I coming have will than of next would of challenging. marketplace would for say come years. years. a talked number pipeline in now better about for soft number to I tell more a excited our I companies And again have very year. also I studios feel I unpredictable about it's couple I'm I'm mobile discovered have you mobile And our of an But a about titles, of which number seeing out launch is all and of what mobile mobile But that a been than that.

the games we and we creative pipeline. trajectory new that and the our very where so of studios are have about of feel And long-term the good amount in going and IP

Blake Jorgensen

you and of, imagine in transitions. Yeah. you've console kind And this seen guys, historically

-- means As do thing, ahead be that Microsoft a to better Sony, of a lot we going don't which out but of to a our great I the lot are existing consoles, than new want and can power the get power simple more. consoles you partners the should of those come consoles assume really

will console the to across growth over of games video XX-plus people's why across the going just blow not game but with that business you next minds. over software doing single last so industry. as much this the so are fun of years this see we're in will innovation, part couple we And what the And because overall of that's with things whole start to part that's cycle that the every And business business years. us seen see you've

hung And up. where so people that's sometimes get

games focused like but a existing to new going short-term consoles, means think a the too substantially the power on is fun we a can lot see it's how And of new what's just see existing that not will under get or Madden, FIFA higher evolve developed about be great to the They going or than historically. and much greater transpired power. be more. the evolve consoles to our which be and do how also games will And

Matthew Thornton

Appreciate the color guys.

Operator

from next America. comes Gee with of Bank Ryan Your question

line Your is open.

Ryan Gee

for on services. the Hey taking questions. guys. A Thanks live couple

So outperformance first very of the encouraged Star Jedi by Wars Respawn. from

revenue. a large base could into you guys which you So, have now generate additional player some

what services add-on opportunity revenue generate for pack fiscal XXXX game? in some sort So, that maybe for live either content of to is the ahead from and/or that

able to down as services to Ultimate comps Thanks. Team execution a higher payers. see from conversion business further live you it the then quarter, versus are Team, the of players just function spend getting sequential relates that last funnel year-over-year guys the easier of And Ultimate how to existing double-digits is out acceleration much to getting of and

Blake Jorgensen

and once engagement very Jedi. me maybe Team benefited in Wars people fashion. then first hit Star spend has again what Team to let address are. not really Ultimate trying one versus trying We're Yes, about the more get can Ultimate from change people some more the their the spend Andrew to to beyond and levels conscious ARPU

better more events in people best is to the to people so to to them in spend engage is and that excited And that they're way get get in.

good overall team that's FIFA the single new said event. the keep people excited been very time people has at think I number design versus trying of as plus events, our and over about are and into so And to playing single that driver growing of Team. on money base been events, more I add Ultimate new of And to earlier, get really any out biggest the trying

they people sports are not them. where Team. they mean are in I why traditional more that different Ultimate you is highly and and Ultimate want see These sport. think and people very play that's than with more that's do engaged we're it's sports -- the to But and engage this what engaging underlying we Team hard-core all fans in what for

Andrew Wilson

this Wars experiences a at just engaged announcements On but media. life very, I experience player very of any of they've very to player one compelling formal of as have what had what you're say point, the who is base strong Star feel Star would Wars, no like right ability most we base of their the anything a

single-play it is highlight I a would game. also

any kind So, industry who an is see Apex is would our one But are an love of what teams additional Legends. who certainly Ultimate thinking live to journey style the play. or that this than in this on this team working take content company Team service most in of we in or the different be where for and creative of players about this next would

this for one what across to coming into excited the going our come meantime We're of subscription we're the by this as think I our almost subscription offers years platforms. with and also in to it over various will strongest moves the be grow that up certainly catalog will and sellers continue help company

Chris Evenden

Next question?

Operator

question with Lu Barclays. from next Mario comes Your

is line Your open.

Mario Lu

guys. end. One Hey and Switch Sims. the one on my on on questions Two

So, today One. the is exceeded million shipped units XX or announced worldwide Xbox more Switch Nintendo that which the similar than

FIFA. three the titles more Unravel, As on publish to currently titles platform version understand there's EA Switch the including expect EA Fe, we legacy of in forward? should I therefore, only going the So, on

ago. me And with the which then experience with and The Sims secondly the that on experiences. XX actually in Facebook coming Sims, industry intriguing X out success recently VR Sims filled a launched they're is reminds of me of announced to that years online very social of Horizons, the since And is kind multiplayer

given So, any its franchise, relaunching popularity? large of on the Thanks. thoughts version online an

Blake Jorgensen

question the So question Sims. let and Switch then hit go the into me I'll AR on

the And mean, and people I experience, many or because a that and Switch. particularly the software. a with great how access a there with done Xbox Switch well They has ways, different So very people we Switch, provides it, both, it, of the in enjoy platform. a are great. love lot a Nintendo have to remember it's Nintendo PlayStation pleased are way

that fact put imagine, platform. of We the can you are a in us big all titles balance by conscious but our Nintendo shot markets be always it or realities the that. long also the with that that platform. and grows, as on what the can software, is content as of trust how the can there. sort which looking Nintendo looking And platform But But grows the software, for our adding helps we're fabulous interest else top-selling of we're discussing we at

the what both grown You hear it's platform. growth future in the of and the Sony on very putting things about will pleased alongside platforms. And we're some we're more with Microsoft's how

Andrew Wilson

on Maxis for guess, Sims and been unbelievably Sims. Sims A that have innovative the and the I the years week. And question Maxis known many community creative deliver continue Great team of teams constantly globally. part little be growing next that for to fact, content -- the will a over XX

these Sims, is of self-improvement, necessarily As focused motivations I on and social interaction done on self-improvement, why has inspiration, play referenced of we fulfilling escape, the type Typically focused Sims social The as games motivations the inspiration, interaction, the earlier, about not and much really think escape, competition. creation, we creation, again, what competition.

and with connect what more the has But years. community experience they in The we've each And was fact in us. continued seen FreePlay, that, around a the in few which things like platforms social Sims for to true Sims manifest are play. that to One And games a share do social broader over the and game grow. is with they other continue

and is rising the use how inside also we're what build create compare we're their up. seeing traditional and sports nature sense, their to in but competition universes. not of And they the And of competition how people able The seeing what and they they and Sims that create also imaginations Sims contrast, they're

that always that creation, think true inspiration, to stay new sorry, Maxis this should to to will Sims platforms escape, things ongoing present a and of as across in notion will that to kind generation you improvement, Sims motivations, in The in so The self The were imagine for a many, that come. become interaction we competition, Sims years world, ago, And cloud-enabled the of part about many Online the in while our actually -- continues FreePlay Sims they experience start years the social like

years really very us is in We're many we tremendous for a have for it's for category any opportunity This motivations and for its a these game competition delivering growth many, that, excited. to it players come. fulfilling doesn't and think

Blake Jorgensen

with trying is, And amazing that community probably our want. The but we that interacting understand the team Sims we incredibly Sims And with done its the all games, engaged most have what have job they the community. with of one with The to and Sims, an has the thing

approaches, it community And really will to that us additions, from expansion whatever and that. encourage coming or allows we game so, continue the it is packs, to develop is,

So wants. as us product. continue see allows for to have and in it or opportunity the to makes that Sims The that games and interest thing fabulous go think all it you a And us demand what we that's develop community the we chase necessarily there I as such is an amazing that feed to leader don't a

Mario Lu

Thank helpful. you. Very

Operator

from comes question Sachs. Mike with Goldman next Your Ng

Your line open. is

Mike Ng

very question. Thank for sales. one unit Hi. much on just you I had the

or like I better for parts downloads offsetting more you. for the units Need game impacting about it V. Battlefield digital plus worse And have full other Star may whether catalog consider the packaged at up just to like things million sales look those any was Wars, that shift unit goods, if the impacted Speed us or are could that quarter? help wondering looked you there that seems key or think it If $XXX factors than for were was year-on-year. pricing sales moving Thank being

Blake Jorgensen

to vs. well digital you Wars long of lot -- obviously, that over mentioned gifting live slightly because delivered about but digitally our period clearly of continues Zombies sell I'd that's little under a holidays. thought big Star we -- that driver. at we services, a But time. delivered will if sales Well, a over tends average And I Star if goes think expectations skew just you was Yeah. Wars, titles one than would lower as our to a say probably we on remember grow. on Plants on the

And So in kind for small a as a driver. wasn't Need then Speed's, relatively of, title that expected. we big so

this we we have board part in overall the across past. did I we my as did pricing discounts And strategy, We in had as did also that you at stronger and we the remarks our but that the the mentioned revenue. year prepared later we than of in as past was than in look helped season look it --

Mike Ng

Great. Thank you very much.

Operator

Crum Your Stifel. next with comes question from Drew

Your line open. is

Drew Crum

us the on fiscal during million plays and to when big And progress update how a growth run guys. you year, that in the for X back the China with you FIFA Thank of current Online XXXX? fiscal annual $XXX rate? role made Can you you've get

of development Battlefield LA of will next the Thanks. the with separately some Vince of he involved how changes the specifically guess And you've the I then DICE Respawn and management at with made becoming game? Director the be in office,

Blake Jorgensen

Yeah.

on FIFA Online much. impacted FIFA quickly still So that X both the on That China. Online, running FIFA and Online business in we're not has X the

very in in In by getting Korea. historical it X well. level. Online to was mainly that there our shut We and responded fact growth Korea. we're pretty has had off And FIFA back Online close FIFA year-over-year to quarter We've the strong driven for

when to we're that doing few now going there. conscious in We the Online consumer to marketplace. that shut as X don't And we're how to next X right will it both want disrupt down quarters play Online and it are China. over But the we and well in

were we're on really Online seeing come and FIFA we're close But to about to in Southeast off where even pretty that of and coming that's in to we're Korea more in China. and we So X that. Asia the growth both excited back

come to that's there, more kind So, but answer. quick of the

Andrew Wilson

on Battlefield Vince question Good V. and

initiatives council the leading and we help does that trust a brings happening going really company for recall kind together and operates council across review have at of brain we this of broad across might organization. was creative announced the the comment, was and constructive, on. insight creative You it Vince that and leaders like provide creative What that to creative set a be like Pixar

us very is And that aligned the company very both and helping impact that this having kind and focused tremendous a in drive proactive and involved push quality and in across Vince against that's of execution.

be DICE great other LA creative Stockholm, supporting some Vince have DICE as we're DICE takes on excited a deeply With he creative leadership there about taking that. involved traditionally but those they and incubating LA, team have and leadership been those great in things him things on and will and have of been also very

change last call. leadership that strong about traction I'm we things. Stockholm, And what that really about game. having and team some the team in pretty do got made strong then this And against Rota I we've is really talked leading Battlefield David the really excited with a really studios is next the doing. now I'm also going is to is the amazing in who Europe impact --

Operator

Hickey comes with from question next Your Benchmark Company. Mike

Your line is open.

Mike Hickey

can one super thoughts Hey remarkable questions. Apex leadership with but my and kind a you Andrew, behave the Obviously, continues shooters Medal Duty: Respawn. Thanks taking truly founded Call that Titanfall, there? to truly ex-Vince your his guy. of success is I Honor, of to in for a the just deeper. Vince go on that guess I congrats Respawn of genres studio answered talent on the Blake, quarter. how obviously it, you mean had maybe Chris on I layer he's Legends,

going at rename then the studio, And rebrand to that or sounds it. DICE like they're new it

years. games that two some three therapy to in look AAA in forward of but in curious sort he's mentioned Vince we from inheriting You shooter can emerging I'm to preproduction, perhaps the development, development if genre

also And great to consoles seemingly hear new new to the I your out then good and coming new excitement consoles, a that. that I market time guess speaking Blake, to broadly with It's share what IP. means. on come

Thank new I you on IP on to thoughts, end the guess, you. console front think how broadly So, cycle? about

Blake Jorgensen

Yes.

doing has still be him stopped asking to is that Laura needs. trying to part sure at and working to been what do He's the running Vince Vince of clear has Just Respawn. Miele hasn't more he resources We're all Respawn. make

DICE to so giving the the needs oversee the resources to. he opportunity into if LA gives pull And team them him to also Respawn chance

So, there ideas IP know, many how probably, are I incubating. new don't we're

of team that. be But expanding in Everyone's overseeing that way all come not excited. means to team Respawn. want great don't I more on got a he's mistaken there. anyone there. has Vince's management He's great So, remit to got that a pretty any He

Respawn still that very as our he well bolster is helpful entire But as every to across team. continue portfolio. helpful day We at

good So by think to company as whole and And the we're very what they've easy how that, guys excited get I company. sorry, Respawn bad has about he work into the didn't to team lady. a because and not hopefully to is a company. small Laura's and Bad mean bad found be people, guys, actually team the say we're to with. acquired a never we're fun big pretty It's really integrated out

our we've and and But year. try that Vince, to of I We that few people are. our sports entire produce just wherever want continue not leverage people to best a can quite -- those we managers portfolio. to got produce our know. best a of across the And I experts, mean, we it's what people we every its they leverage try to that's games collection just

lost time. Thank out everyone. one we're was You if we don't on don't it have part people put world of And the to. the All your you. I shut got Mike you sports out that biggest that. telling is year-after-year it All me was budget one one best and off, Chris We in get of games on question amazing because -- time right. doing last of didn't right, you. there But

Andrew Wilson

Thank you.

Blake Jorgensen

Talk to quarter. next everyone

Operator

today's This call. conference concludes

disconnect. You may now

Electronic Arts (EA) 30 Jan 202020 Q3 Earnings call transcript