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Digital sales prop EA up in quarterly earnings

EA's profits took a slight dip year over year for the first quarter, but the company still managed to do well thanks to strong digital sales in FIFA and Star Wars: Galaxy of Heroes.

EA’s profits dropped year over year in its first quarter for the 2017 fiscal year, but in-game sales took center stage to boost the company even without any blockbuster releases from the publisher. 

The company’s first quarter for 2017 ended June 30th 2016, and in a statement, the company says it earned $22 million in profit on $682 billion of revenue (all values non-GAAP). That’s a sharp drop in profits from the $49 million it earned off of $693 million in revenue from this quarter last year, but on an earnings call, EA CEO Andrew Wilson pointed out that last year’s release of Battlefield Hardline drove up its first-quarter earnings. 

EA says that the major revenue drivers this time around were digital sales across games like FIFA 16’s Ultimate Team mode and Star Wars: Galaxy of Heroes

Mirror's Edge Catalyst, which released on June 7th, doesn't make any appearance in the company's financials, which doesn't bode well for the games' sales numbers. 

In response to a question about Niantic’s success with Pokemon Go, and if EA would be integrating augmented reality into its mobile games, Wilson diverted the conversation to discuss building a larger EA digital platform that would let players connect to their games, and other players, across multiple devices, similar to the EA login currently used for its mobile games.

The discussed platform would seem to be a possible expansion of what the company has attempted with EA Origin. 

And when it comes EA’s investment in VR and AR technology, Wilson says the company is working on more experiences for Playstation VR, and that its relatively low price makes it the most ideal platform to develop VR for its usual audience.

At next quarter’s end in September, EA’s earnings will be changing to support only GAAP numbers. The company is expected to earn $915 million in revenue, and expects a net loss of $51 million. (For context, this month’s GAAP earnings were $1.27 billion, and $440 million in profits.)

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