EA says players are 'rapidly shifting' to live services, open world games, massive communities

EA is doubling-down on three main features for its upcoming games as it reaches for maximized profits.

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Electronic Arts recently announced it would lay off 5% of its workers, or about 670 people. In total, EA is to lay off 11% of its workforce by March 2025. The reduction is mainly to lower operating costs and streamline profits during an incredibly challenging market landscape. Trends indicate that consumers are apparently moving away from physical-based singleplayer games in favor of digital live service titles, especially in the F2P segment.

EA is now says that it is most interested in giving gamers what they want. The publisher wants to reduce risk and volatility, so it's trying to cater to its core strengths: live games that service millions of players with content and microtransactions. It just so happens that, according to EA, these are the types of games that most consumers want to play anyway.

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In a recent update to workers, investors, and consumers, EA Entertainment president Laura Miele says that there's a 'rapid player shift' to, coincidentally, the very games that EA is best at making.

"One of the essential parts of delivering on our plans is making sure we are listening to our players and investing in the games they want to play," Miele said.

"The reality of a creative business is that market conditions and players' needs are always changing. We're seeing a rapid player shift toward large open-world games, massive communities, and live services."

These words definitely hold truth. PlayStation just reported its best-ever holiday quarter, primarily driven by revenues from microtransactions and the significant over-performance of a particular free-to-play game. New online titles like Palworld, Enshrouded, and Helldivers 2 have sold millions of copies, becoming breakout hits along the way.

The top-earning and most-played Xbox games are also GaaS titles, including the likes of Minecraft, Elder Scrolls Online, Fallout 76, World of Warcraft, Sea of Thieves, and Grounded.

Within EA's own slice of gaming, the company earned a record $1.71 billion from live services throughout Holiday 2023, and $654 million from full game sales. Throughout calendar year 2023, EA earned $5.6 billion from live services and GaaS monetization accounted for 73% of all net bookings for the full year.

Electronic Arts CFO Stuart Canfield outlined the company's four-part business plan:

In executing on our strategy, we expect to scale operating leverage through the following growth levers:

• one, expanded player acquisition, engagement, and retention;
• two, highly accretive digital and live services;
• three, blockbuster new releases from our development pipeline, alongside compounding growth across our core franchises;
• and fourth, discipline and focus on aligning our cost structure to invest in support of our strategic growth opportunities

Electronic Arts CEO Andrew Wilson offered these somewhat vague assertions to investors about the future of Electronic Arts titles:

The evolving worlds, unfolding stories, and rich characters of our live services are deepening players' relationship with our IP and broadening the global appeal of our portfolio.

To further entertain our communities, we are building more ways for them to play, watch, create, and connect to generate growth and longevity in our biggest franchises.

Looking further ahead, as more people spend more time playing and connecting in and around our titles, we see incredible potential for growth. Within our online communities, we are expanding blockbuster storytelling through deep, rich characters and new story modes to deliver bigger, broader games and live services.

Connected experiences offer new, cutting-edge ways to engage and inspire players, and can unlock future innovative growth opportunities.