Electronic Arts has made over $16 billion from live services in the past eight years, and digital revenues are becoming more and more important for the publisher.
EA's billion-dollar empire is built on digital. The past decade has shown a few clear trends for Electronic Arts: Digital is dominating, game sales are becoming less relevant, and live services are meaningful for both short-, medium-, and long-term earnings. Case in point: Live services made up 81% of EA's FY21 digital net revenues. EA has flexibly adapted to a more digital-oriented marketplace and diversified its earnings to rely on in-game purchases rather than raw game sales. As a result the company has become a leading force in the industry.
Over the past 8 years from FY14 through FY21, the games-maker has made a whopping $16.5 billion from live services. Live services made up 42% of EA's total $38 billion net revenues across the 8 years, and over 63% of digital net revenues for the period. Live services have grown 292% over the past 8 years and represent a CAGR of 19%.
The main contributors are annualized sports games like FIFA and Madden, with Ultimate Team alone making up a significant portion of yearly digital earnings, as well as new heavy-hitters like Apex Legends (Apex alone is about to break $2 billion in earnings since releasing in FY20, making up nearly 1/3rd of live services revenues over the past 2 years). EA has become a lot less reliant on game sales. In fact, live services have always made more than half of yearly digital net revenues over the past 8 years.
- Read Also: EA made $28 billion from digital in 10 years, decade growth up 427%
- Read Also: EA's Ultimate Team earnings grew 400% in 8 years to over $1.6 billion
So what does this tell us? EA should deliver more of the same. Expect more microtransactions, in-game purchases, subscriptions offerings, tons of post-release content, DLC, expansions, etc. all with a heavy emphasis on engagement.
EA has adopted a new three-part plan that focuses on live services and new engagement models, mobile games, and new game releases.
That's not to say EA is giving up on new games, or even singleplayer games for that matter. Jedi: Fallen Order has catalyzed a new focus on singleplayer games at EA and the publisher is doubling-down on actual microtransaction-free titles that rely solely on purchase power. New games include Dead Space and a new Jedi: Fallen Order sequel. The new Dragon Age is also reportedly 100% singleplayer now too.
Remember that games are a gateway to microtransactions and live services. While it's likely most of its new games will have live services in some fashion, whether they be micro-monetization via in-game purchases or macro-monetization via paid DLC and expansions, not every game needs to be inundated with online engagement mechanics for EA to make lots of money.
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