EA Q3 results - The Old Republic out "calendar 2011"
EA has announced third quarter results, confirming that both Medal of Honor and Need for Speed: Hot Pursuit have now sold more than 5 million units and announcing an "expected" calendar 2011 release date for BioWare MMO Star Wars: The Old Republic.
EA said it is incurring "significant" costs in developing the game, which will hit "after the close of fiscal 11," putting the title in a release window between March 31, 2011 and December 31, 2011.
It was rumoured last week that the title would ship in September 2011.
EA has previously said that it is "targeting a spring 2011 release" and confirmed in May last year that the MMO wouldn't make this financial year, which ends March 31, 2011.
John Riccitiello refused to be drawn on the game's headcount, saying he was "subject to NDA" with the firm's Lucas partnership.
The exec did take the opportunity, though, to warn against "falsehoods" being spread by "gamer blogs" about costs releated to the project.
EA is rumoured to have spent between $100-$300 million on the game, but Riccitiello said the number was "higher than anything we have ever put in place".
The Old Republic will be profitable with 500,000 subscribers.
“Light sabers versus swords”
He added that the game would succeed thanks to a "light sabers versus swords" factor, talking in veiled terms about World of Warcraft, and that the company would be "aggressively" attacking the game's opportunity.
The exec said that 1 million subscribers "rings our bell, does very well for us economically," in relation to The Old Republic, adding, "It's our view that we can be very successful without fundamentally challenging the market leader because we think we'll probably hit the smaller competitors harder when we get out there."
He said that The Old Republic will be profitable with 500,000 subscribers.
Janco Partners’ Mike Hickey said in January that he believes investors are "betting against" the game's success.
Riccitiello also said EA is to announce a "very exciting" FPS later in the year.
“I’ve been saying that it’s our long-term goal to take back the first-person shooter category leadership. We made strong progress in calendar ’10 over calendar ’09,” he said.
EA has a "very exciting," unannounced FPS entry "later in the year"
“This year, with the trail end of Battlefield Bad Company 2 still doing well, Medal of Honor doing well, Crysis [2] and Bulletstorm, we’re clearly going to make more progress on our goal, and that’s before we get to what I think is going to be a very exciting entry later in the year that we’re not yet announcing.”
Future plans aside, EA was keen to focus on high sales of games in the last calendar year.
FIFA 11 has now sold more than 11.5 million units, a 16 percent increase over the 2010 version, the company said in a call following the release of the figures.
Madden 11 has now sold over 5.5 million units. Sales of over 5 million units were achieved by five games last year, the publisher said.
EA COO John Schappert said that Dead Space 2 was "approaching 2 million units sold-in": the Visceral horror sequel released last week. The sequel is outselling the original 2:1.
Despite large sales of key products, however, EA posted a gloomy net loss of $322 million for the quarter, deepened from the $82 million loss posted a year ago.
Net revenue decreased year-on-year for the three months ending December 31, down to $1.05 billion from $1.24 billion in the previous corresponding period.
Digital revenues increased steeply, though, up from $152 million in the previous third quarter to $211 million in Q3 2011.
The Old Republic. Out. This year.
"We had a solid third quarter with non-GAAP earnings up more than 75 percent year-over-year," said Eric Brown, Chief Financial Officer.
"EA reported 39 percent growth in digital and is tracking toward our $750 million full year non-GAAP digital revenue target."
"We are pleased to report another strong quarter," said Riccitiello.
"Our $600 million stock buyback demonstrates our confidence in EA's digital strategy."
Digital explosion
In year-over-year growth, EA reported accelerated results in the digital and high-definition packaged sectors, while standard definition and distribution businesses slowed markedly.
Within digital sales, all categories showed increased revenues year-on-year, with MMOs and free to play, casual and social games leading the pack over console and mobile.
By platform, mobile digital revenue remained largely static. Add-on DLC content and free-to-play extra item purchases drove increases in the PC and console spheres, with the former growing by 38 percent increase in the last twelve months, and consoles a whopping 103 percent last year and 130 percent last quarter.
EA's two major online titles, the Battlefield franchise and Online Pass-enabled FIFA, both showed major growth, with FIFA 11 earning $10 million more than its immediate precursor, and Battlefield Bad Company 2 outstripping battlefield 1943 by $256 million.
The company was also bullish on mobile. After Christmas the company held the 14 top apps for iPhone and iPad, and said it intends to "maintain and grow leadership" in the market.
EA said it is the top publisher on iOS, Windows Phone 7, Blackberry, and held two of the top five Android apps during Christmas and New Year.