EA is one of the heavyweights of the gaming industry
EA owns and operates major gaming studios in several countries, including notable subsidiaries such as BioWare, Codemasters, DICE, PopCap Games, and Respawn Entertainment. With more than 6.99 billion U.S. dollars of annual revenues and a net income of 789 million U.S. dollars in its most recent fiscal year, Electronic Arts (EA) is one of the biggest players in the gaming industry worldwide. The company reported approximately 12,900 employees during its last fiscal period. Although EA produces and publishes games for all major gaming platforms, the company consistently generates approximately two thirds of its revenues via console games. In the fiscal year 2022, EA generated almost five billion U.S. dollars in live service revenues. These live services include extra content, subscription offerings and other revenue generated outside of the sale of the company's base games.Monetization strategies and loot boxes
Live services are Electronic Arts’ second-fastest-growing revenue segment, reporting a 24 percent year-on-year-growth compared to 2021. This is hardly surprising, as gaming companies aim for players to engage with their games and services over longer periods of time, and purchase additional content designed to provide value top layers and extend and enhance gameplay.This additional digital content includes loot boxes, consumable virtual items that are bought with real life money which can be redeemed to receive a randomized selection of further virtual items, or loot, ranging from simple customization options, to game-changing equipment such as weapons and armor. Loot crate mechanics have become highly criticized, with opponents comparing the practice to gambling and pay-to-win gameplay. EA is no stranger to loot box controversy and the company has faced several class-action lawsuits regarding the matter, the last of which was dropped in March 2021.
EA’s most popular live service is the extra content purchased for the Ultimate Team mode associated with its sports franchises Madden NFL and FIFA.
Sports games drive EA user engagement
Madden NFL and FIFA are Electronic Art’s flagship franchises with new versions published every year. New FIFA series releases sell millions of copies within the first month of release and titles from the series regularly rank among the best-selling games of the year. Despite the mega success of the collaboration, FIFA and and EA have decided to part ways after differences in vision regarding the brand license. EA is planning to rebrand the FIFA series as EA Sports FC and FIFA 23 will be the last title published under the current license.This revamp of the company's soccer franchise is part of the company's larger branding strategy regarding its EA Sports segment. In February 2021, Electronic Arts announced a return to EA Sports College Football. This strategic decision is driven by several factors. Sports gaming audiences are highly engaged and willing to spend money on additional gaming content, as evidenced by EA’s FIFA and Madden audiences. Also, college football is a major pastime in EA’s biggest single market, the United States. All the pieces are lining up for EA to have another major moneymaker on their hands.
