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Almost Half of EA's Sales Are Now Digital

The Sims 4 family playing

Almost half of EA's units sold in the first quarter of its financial year were sold digitally. EA recently launched its digital game subscription service on PlayStation 4, bringing a library of games to the console with EA Access PS4. While the subscription is most likely not counted in EA's digital sales numbers, EA Access is one example of the industry's move to digital and service-based sales models.

EA is perhaps one of the most controversial companies in video games. The publisher seems to constantly be in hot water for decisions that upset players, mostly related to loot boxes - or "surprise mechanics," as EA likes to call them. When the company launched Battlefront II in 2017, the game's loot box backlash hurt the company's stock prices, and EA's response to those upset became the most downvoted Reddit post ever. Just a month before EA laid off 350 people, non-profit organization As You Sow later called EA CEO Andrew Wilson one of the "most overpaid" CEOs in the U.S. EA's executive vice president of strategic growth, Matt Bibley, spoke in an interview earlier this month about why EA isn't the the bad guy, citing the company's EA Originals program as an example of its goodwill.

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According to GamesIndustry.biz, 47% of EA's total unit sales in Q1 2020 were digital, which is a 7% increase from digital sales in Q1 2019. This contributed to $3.73 billion in digital net bookings during the last 12 months, an increase of 5% year-over-year, according to EA. EA's digital net bookings made up the majority of its sales in those 12 months, representing 76% of its total net bookings. EA's net bookings for Q1 2020 amounted to $743 million, falling from $749 million in Q1 2019. This drop was due to the fact that A Way Out released in Q1 2019, and the FIFA 18 World Cup event took place during Q1 2019. EA's net revenues rose from $1.1 billion in Q1 2019 to $1.2 billion in Q1 2020, and the company's net income was $1.4 billion, which is due to a $1.1 billion income tax benefit EA received during Q1 2020.

Anthem's Reddit Is Depressing

EA also reported that downloads of The Sims 4 expansion packs and game packs increased 55% year-over-year, that more than 3 million players logged in daily during FIFA's Team of the Season event, and that Star Wars: Galaxy of Heroes had nearly 80 million players life-to-date by the end of Q1 2020. Anthem, EA's bungled live-service third-person-shooter, went unmentioned in the company's financial report - which isn't a big surprise, given that the game was also a no-show at E3 2019. Despite the fact that the game's launch hurt EA's Q4 2019 financials, resulting in EA reconsidering its release process, the company has said it is not giving up on Anthem.

EA's increase in digital sales is part of a larger industry shift. For years now, the gaming community has spoken of physical retailers like GameStop dying as digital game downloads have become more common, and services like Google Stadia aim to do away with downloads altogether, bringing gaming into to a cloud-based future. Other companies are likely to experience the same trend as EA, if they haven't already.

Next: Single-Player DLC Is Dying

Source: GamesIndustry.biz

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