EA Witnesses Revenue Boost Due to Rise in Demand for Video Games

The video game publisher Electronic Arts (EA) estimates full-year adjusted revenue above Wall Street estimates, sitting on the broader increase in video game sales as people stay at home due to the Coronavirus pandemic. The video game sales in the US have risen dramatically in the last couple of months as the virus shut down the whole country and forced millions of people inside their homes, with sales in March reaching their highest in over a decade.

The analysts assume that the continued stay-at-home orders to further boost businesses and user engagement for video games across every platform. However, EA’s shares were dropped by about 5% in extended trading.

EA Witnesses Revenue Boost Due to Rise in Demand for Video Games

Michael Pachter, Wedbush analyst told that “I think investors thought that shelter-in-place would trigger even more growth than they guided to,”.  “Expectations were too high, and the company is probably being a wee bit conservative.”

Electronic Arts, same as their rivals Activision Blizzard and Take-Two Interactive Software, has a record of guiding conservatively at the start of the year. The revenue collected from live services in the first quarter was $832 million, up about 17% from a year ago.

EA makes a bigger chunk of its sales from its live services which involve in-game purchases and “EA Access”, a subscription-based online service, among many other items.

EA stated that “With more people staying at home, we have experienced, and are continuing to experience, heightened levels of engagement and live services net bookings growth to date”.

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EA’s famous titles, which include its holiday launch “Star Wars Jedi: Fallen Order” that has 10 million+ players to date, competes with other big-budget titles from competitors Activision Blizzard and Take-Two Interactive. The video game company predicts full-year adjusted revenue of $5.55 billion, beating analysts’ average estimate of $5.37 billion.

 

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