EA outlines new three-part plan responsible for $7.3 billion guidance

EA outlines its new three-part plan that will help surge its next-year FY2022 earnings to a record-breaking $7.3 billion in net bookings.

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Following record $8 billion+ earnings and thunderous ecosystem engagement in Call of Duty Warzone and COD Mobile, Activision's four-part plan is turning heads. Big-name publishers like EA are taking notice and are currently laying out frameworks for their own long-term plans of sustainable digital profitability.

Instead of four pillars, EA's plan has three main parts:

1. Premium/paid experiences (FIFA, Battlefield, Jedi Fallen Order, Dragon Age, etc)
2. Live services (Apex Legends, Ultimate Team)
3. Expansion to new platforms, business models, geographies (mobile games, cross-connected ecosystems, Apex in China)

This is pretty similar to Activision's four-part plan put into place in 2018, which includes 1. paid games, 2. live services, 3. mobile games, and 4. new engagement models.

Mobile in particular is a big part of the plan. EA expects mobile to accelerate dramatically and double mobile net bookings to $2 billion in the next three years, led by Glu Mobile and more popular adaptations of its franchises. However, EA has taking a "very conservative posture" on its revenues from recent mergers/acquisitions of Glu Mobile, Metalhead, and Codemasters.

These companies don't have significant weight in FY2022--that will come later as EA doubles down on franchises like F1 and more casual titles from the mobile-makers.

EA will expand its mobile presence further to non-Western markets, complete with "major innovations" in mobile EA Sports franchises like FIFA, Madden, and UFC, as well as MLB touch-sports baseball.

The plan will manifest across EA's FY2022 pipeline, which includes:

• EA Sports (Annualized FIFA, Madden, NHL, PGA Tour, Codemasters racing games)
• Apex Legends (F2P on consoles, PC and Mobile) & Battlefield (premium on consoles, PC + F2P on mobile)
• Mobile titles (more franchises getting mobile adaptations)

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EA's IPs will diversify and spread across all major platforms including F2P mobile, consoles, and PC, all with separate monetization revenue streams for maximized earnings potential.

One of these pillars combines the might of juggernaut franchises Battlefield and Apex Legends. Apex is a huge breadwinner for EA that has generated over $1 billion in lifetime revenues, with $600 million earned in FY2021 alone. Battlefield is likewise as big but in a different way, focusing on a premium experience that will have an added F2P mobile version, similar to Call of Duty.

All of the pillars have something in common: Live services and monetization. EA will tie all of these moving parts together with separate monetized streams of revenue, and mobile in particular will be an access point to the franchise that pulls more gamers into the console/PC premium ecosystem while also offering a standalone experience.

Interestingly enough, EA is separating its mobile portions from the dedicated premium games. Apex Legends mobile, for example, will have its own progression system and separate microtransactions.

This model will help EA hit a record $7.3 billion in revenues throughout FY2022. It's unclear how the Battlefield F2P mobile game will connect to the mainline release (if at all), and whether or not EA will adopt its own kind of Warzone ecosystem.

EA CEO Andrew Wilson says this will be a blueprint they apply to all of their franchises. Activision is also adapting all of its franchises around its four-part plan, leading to multiple mobile ports including Diablo Immortal and at least two Warcraft releases.

"As we look forward to FY22 we are accelerating, powering by organic growth in our existing business, development of new businesses, and growth from our recent acquisitions. We're forecasting growth in FY22. Our net bookings guidance reflects 18% year-over-year growth to $7.3 billion. This includes organic growth in our core business and the addition of Glu, Codemasters, and Metalhead acquisitions.

"From this position of strength we are also investing in the future of our business and we are expecting to continue to grow underlying profitability. I want to spend time today talking about three primary growth drivers in FY22:

1. Expanding the EA Sports business
2. Growing our Apex Legends and Battlefield franchises
3. Our mobile growth strategy

"We have a foundational strategy for growing our blockbuster brands that we are applying here: Best-in-class premium experiences, deeply-engaging live services that create social networks in our games, and expansion to more platforms, new business models, and new geographies.

"The model is how FIFA, Apex Legends, Madden NFL and The Sims became some of the most successful global live services in the industry, and we are applying it as a blueprint across our franchises."

The real question is how Dragon Age and Mass Effect will fit in here. BioWare was barely mentioned in the call...which is pretty strange. All eyes are on Battlefield, EA Sports, and Apex Legends right now.