5 Things Electronic Arts Inc.'s Management Wants You to Know
Electronic Arts continues its impressive run.
Shares of the video game publisher rose on Tuesday, after the company turned in a fiscal fourth quarter earnings report that greatly exceeded expectations. Electronic Arts' business appears to be firing on all cylinders, as demand for its games continues to surge in the face of strong next-generation console adoption.
During its subsequent earnings call, Electronic Arts' management, including CEO Andrew Wilson and CFO Blake Jorgensen, offered a number of key insights into the company's business. Below are five of the most important quotes from that call.
On Electronic Arts' upcoming slate of gamesAs a major video game publisher, Electronic Arts' business is entirely beholden to the popularity of its games. A major title can generate the bulk of its performance in a key quarter, while a disappointment could lead to an earnings miss. Early in the call, Wilson offered investors a quick rundown of Electronic Arts' plans for new games in the coming fiscal year.
Margins are improvingAs a business, Electronic Arts' underlying performance is improving. Two years ago, Electronic Arts' management made acommitmentto double adjustedoperating margins to 20%, but managed to surpass that guidance a year ahead of schedule. During the call, Jorgensen noted and explained Electronic Arts' rapid improvement.
The digital shift continuesElectronic Arts has been a vocal proponent of the ongoing shift toward digital distribution. While physical game discs still compose the bulk of games Electronic Arts sells on major consoles, it may not be that way for much longer. During the call, COO Peter Moore noted the trends Electronic Arts is seeing in its business.
Expectations for Star WarsAlthough Electronic Arts has many games scheduled for its upcoming fiscal year, in terms of importance, one title in particular is likely to stand above the rest. Star Wars: Battlefront, its upcoming first-person shooter, is scheduled to debut inNovember, just a month before the release of the next Star Wars film. During the call, Jorgensen gave Electronic Arts' expectations for the games, likening it to past Battlefront games and Electronic Arts' other first-person shooters.
A possible delay?Electronic Arts has delayed several of its key games in recent months, including most recently, Battlefield: Hardline. The delays don't seem to have had much of an effect on Electronic Arts' performance, as the extra development time may have ensured a better product. But that likely won't be true for Star Wars: Battlefront. A key element to the game's success could be its timing in relation to the debut of Star Wars in theaters. If Battlefront is delayed -- perhaps pushed out to January or February of 2016 -- some of the buzz could die down, and sales coulddisappoint. During the call, Wilson touched on thistopic, noting that anything is possible, but the company is currently very committed to launching Battlefront in November.
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