Mentioned in this article
- Electronic Arts (EA) reported total net revenues of $1.35B USD for its fiscal year second-quarter period, which is up 5% year-over-year, and a net income of $854M.
- The company announced a partnership with Valve to distribute games via EA Access, a subscription service, on Valve’s Steam platform.
- EA informed investors that it will not ship the NBA Live game it has been working on with the league this year, as the company waits for a console refresh next year.
Video game company Electronic Arts (EA) announced its Q2 Fiscal Year (FY) 2020 financial results for the period ended Sept. 30. The company reported total net revenues of $1.35B, up 5% from 1.29B during the same period last year. Its net income was up 235% to $854M or $2.89 earnings per share (EPS), compared to $255M or $0.83 EPS in Q2 FY 2019. EA repurchased 3.3M shares for $306M during the quarter.
The significant growth in net income can mostly be attributed to the impact of tax matters. During Q1, EA completed an internal transfer of some of its intellectual property rights to its Swiss subsidiary (EA’s international business headquarters) and was required by a court to record a tax accrual. Additionally, the company was affected by Switzerland’s change in its income tax rates during Q2. As a result of these events, EA recognized an income tax benefit of $625M during Q2. Income before benefit from income taxes was $284M, compared to $276M in the same period in FY 2019.
The Redwood City, California-based gaming company reported that its title Apex Legends had 70M players life to date. Furthermore, EA CEO Andrew Wilson stated during the company’s earnings call that it wouldn’t be shipping an NBA Live game this year due to a console refresh next year, which led EA to rethink the NBA game the company had been working on with the league.
Moreover, EA’s CEO addressed the company’s intention to broaden its footprint in esports, its partnership with Valve to distribute its games on Steam, and the ongoing cloud gaming development efforts.
“Competitive gaming adds another dimension to the experience to play and watch, and we’re building on our strength here with more of our franchises set to enter esports in the coming months,” said Wilson in a release. “We’re thrilled to be bringing the EA and Steam communities together through the EA Access subscription, and we’re working to reach more platforms in the near future. As cloud gaming continues to develop, through Project Atlas we are testing games streamed on public cloud infrastructure to ensure we are at the forefront of this developing space.”
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