The video game company Electronic Arts has enjoyed an excellent last fiscal quarter with bookings twice that of the same time last year. As a result, EA has raised its guidance for bookings to be $7.6 billion for the year ending March 2022. Much of this is due to EA’s flagship sports titles, but the brand has also made some shrewd acquisitions such as Codemasters, Playdemic and Glu Mobile in its bid for video gaming supremacy.
Electronic Arts currently has a market cap of $40 billion and the bulk of the company’s success has come through its iconic sports simulator games such as the Madden, FIFA, UFC, NHL and PGA Tour franchises. Such popular titles have been augmented by the Formula One games – a welcome addition from EA’s recent acquisition of the Codemasters video game company.
Sports games like these have been pivotal for EA’s growth as they cultivate a dedicated fan base who will keep coming back to purchase each edition of the game. For example, there was a 16% increase in players of FIFA 22 compared to the previous instalment of the soccer simulator.
Plus overall bookings are expected to grow 23% year over year with sports gaming titles showing themselves to be impervious to various countries’ emergence from pandemic lockdowns. Few brands can compete with EA’s sporting output, although Take-Two Interactive have made some inroads with its NBA 2K franchise.
However, Electronic Arts has been shrewd enough to make sure that it also operates outside the sports game genre. Recent hits include the phenomenally successful Apex Legends franchise. The free-to-play title is rapidly approaching $1 billion in annual bookings and with a mobile game release of Apex Legends due next year, it sets EA up for a big year.
EA has also enjoyed success with its rollout of in-game purchases for leading mobile titles such as Sims and Star Wars. Plus with further success from a variety of subscription-based games, it sets Electronic Arts nicely for what is widely expected to be a busy festive period.
The battle to lead the video games industry
Electronic Arts has made a good case for being the leading video game company in 2022. With a steadily rising audience base and increased engagement, expectations are that EA is set to have a massive year next year.
EA is looking forward to a relatively untroubled release schedule in 2022 with major releases such as Battlefields and Apex Legends in the pipeline. This is in direct contrast with other video games companies such as Activision Blizzard which has suffered delays to at least two key titles.
While EA’s net bookings for 2022 are still projected to be lower than that of Activision, there’s every chance that Electronic Arts could seize the lead in other areas such as that of audience size. Plus with EA enjoying its best-ever second quarter in its company history, it offers yet another reason why investors in Wall Street are so keen on this pioneering video game company.