COVID-19 has closed down practically every major worldwide sporting event, delaying and cancelling leagues and seasons. Now fans are turning to big EA games like Madden and FIFA for their fix.
EA, like other games companies, is benefiting tremendously from COVID-19. Consumers are staying at home and buying more games to play in their off time. This goes double for EA. As the world of sports is put on hiatus, gamers are recreating seasons of their own in EA's billion-dollar sports franchises.
In a Q1'21 recent earnings call, EA CFO Blake Jorgensen brought up a good point. Now that football and soccer seasons have been suspended, the only real way to continue engaging with these sports is through EA's games. This has led to a massive surge in digital revenues like game sales and microtransactions.
Total Q1'21 earnings have broken new records with $1.459 billion, a new all-time Q1 high. Game sales are up 202% and live services are up 61% to $1.03 billion.
EA is on a hot streak.
Over 7 million new players have jumped into FIFA in the three-month period, and more people are playing FIFA now than any other time in EA's history. Ultimate Team earnings are up double-digits by 70%, EA says, on the backs of this strong engagement.
And it's all because there's really nowhere else to go to get this sporting fix.
"People are engaging with sports because that's what they love to do. If you are a sports fan, it doesn't stop. The only way they're getting their sports engagement is through our games, and that's a huge benefit for us," EA Chief Financial Officer Blake Jorgensen said in a recent EA Q1'21 earnings call (around ~46 minutes).
"But we don't know--because there's no precedent on this--is what happens long term if the sports seasons get delayed even further."
"We do believe that everything we're seeing now is that we can be a huge factor in helping people socialize and do what they love around the sports catalog. Don't forget the social part, because remember, people don't sit and watch a sports game alone. They watch it and interact with all their friends that they know engage in that sport. What we're doing is enabling that to happen through our games, and through the watching of esports online."
EA is set to continue this trend with the release of two new sports games: Madden 21 next month and FIFA 21 in October.
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