Although EA makes a ton of different games, one thing remains constant: live services. All of EA's biggest games are designed to make money over time outside of game sales. This could be post-launch DLC (which Jedi: Fallen Order should also have), subscriptions like its EA and Origin Access services, and of course microtransactions.
It's to the point where if EA is making a AAA game, we should expect some sort of online component with microtransactions. Despite the massive Battlefront II loot box controversy, EA hasn't really budged from this strategy. Sure it's gone from monetizing randomized lootboxes to cosmetic skins as in Apex Legends and Anthem, but ultimately the end goal is still the same: make recurring revenues over time by monetizing engagement that's fostered by online play.
Jedi: Fallen Order shouldn't be exempt from this focus. In fact, given EA's current disrupted earnings, we could see the publisher double-down even harder on monetization.
Back in 2017, the company said live services are more meaningful than full game sales. One path sees EA making a set amount of cash from sales, the other sees earnings evolving years past games' launches.
EA's live services are so potent they consistently make double or sometimes even triple than full game sales every quarter. In Q3'19, a quarter that EA described as "hard", the company earned over $780 million from live services and raked in $2.2 billion over the last 12 months.
So any time EA shells out lots of cash to make a big game we should expect monetization to follow. It's ingrained with the publisher's DNA and has been part of its core business tactics for years now.
This is doubly true for action games.
EA has doubled-down on action games for years now because they fold more neatly into the live service wrapper. Action games are more accessible, and play nicely with online modes, and therefore can not only sell more copies but also rake in more cash via microtransactions. We've seen this happen with Mass Effect: Andromeda's casualization from an RPG into an action game, and BioWare's new IP Anthem, which was built from the ground up as a weird "genre-melded" experiment with artificially elongated mechanics, tedious grinding, and monetization to boot.
Jedi: Fallen Order's launch comes at an interesting time for EA.
Following its Q3 revenue misses--the same period it made $800 million from microtransactions, it missed its earnings targets by over $100 million--the publisher said it has to "make hard choices about investments."
This could lead to more cancellations, like how Visceral Games was shut down and its Star Wars game was cancelled, or more games morphed into action-based games with live mechanics. All of these things would be done to recoup potential losses.
EA recently formed a new internal Creative Council to help greenlight, guide, and plan out new projects and their services. It also recently fired 350 non-game dev employees.
The ramifications of the publisher's revenue misses will carry forward until next year, it says, which could mean a harder focus on what works. And what works for EA has always been monetization. Based on how EA operates, I was able to predict Anthem would have microtransactions, and that Battlefront II would be monetized with lootboxes. This trend should continue onward until live services continue making EA billions every year.
Disney approves of EA's Star Wars games
EA signed an exclusive decade-long deal with Disney to make Star Wars games. Over the last six years, EA has shipped two major games: Battlefronts I and II. Both have sold quite well, and helped propel EA's live services consistently quarter-after-quarter.
Everyone thinks Disney is outrageously mad about this sparse lineup, but the House of Mickey Mouse is actually quite enthralled. After all, these games are money-making machines that belt out cash over time.
Disney is actually happy with EA's games, and still has no plans to make its own Star Wars titles. Disney's Bob Iger says its relationship with EA is quite healthy and that licensing deals will continue for the foreseeable future.
"We've had good relationships with some of those we're licensing to, notably EA and the relationship on the Star Wars properties. And we're probably going to continue - we're going to continue to stay in that side of the business and put our capital elsewhere," Iger said in a recent earnings call to investors.
"We're good at making movies and television shows and theme park attractions and cruise ships and the like, and we've just never managed to demonstrate much scale on the publishing side of games."
We bet live service revenues are a big reason why Disney approves of EA's strategies.
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