Due to the COVID-19 pandemic, more people are staying home and playing video games. As such, spending on gaming has grown, and Electronic Arts is among the companies that is benefitting. In a new “fireside chat,” EA CFO Blake Jorgensen said the company is expected to announce its biggest-ever Q1, which runs April-June.
EA said in May that it expects to make $5.525 billion in revenue and a profit of $978 million for the period, which is a record for Q1, but Jorgensen said that the real numbers will be even bigger than that.
The full numbers will be announced during EA’s earnings report on July 30, but Jorgensen said today, “What I will tell you is it has been much stronger than we anticipated.”
EA plans to release some of its marquee upcoming games–FIFA 21, Madden NFL 21, and NHL 21–a little later than usual due to the impact of working from home and other issues connected to COVID-19. However, Jorgensen said EA will make up the differences through new campaigns that push microtransactions for Ultimate Team in these games.
“When we gave guidance, we anticipated slightly different dates for shipping FIFA, Madden, and hockey, but we don’t see that as a big issue,” Jorgensen said. “We will do everything we can possible to fill in the week or so that is later with extra Ultimate Team activities. But more importantly, getting the product out at quality and strength is the thing we have really been focused on.”
Jorgensen acknowledged during the call that EA’s good fortunes are coming at a “very challenging time around the world.” But he sees gaming as a light in the darkness that is helping people stay connected with friends and enjoy their lives at home.
“People have been re-allocating their entertainment dollars into video games,” he said. “They’re spending more time at home, more time with their families, and obviously we’re benefitting from it. It has exceeded our expectations across all of our businesses–live services, full games, all of our catalog products, mobile.”
Jorgensen went on to say that the time ahead will be more difficult to predict in terms of business results. He doesn’t know when people will go back to work or if there will be a second wave of the virus. If people stay home longer, EA will presumably benefit in turn, but if they go back to work, results might be lower than anticipated.
For EA specifically, its 15,000 employees around the world are expected to return to work on a staggered basis, Jorgensen said, but there is no strict timeline yet for when that may happen.
Whatever the case, Jorgensen said, “We’re very excited about where the business is going.”
Whereas other forms of entertainment–like concerts, sporting events, and going out to eat–have been significantly impacted by the pandemic, the video game business has been able to continue and thrive.
“It’s been a great time for video games,” Jorgensen said.
For more from the EA fireside chat, check out the stories linked below.