Electronic Arts has posted its results for the second quarter of the fiscal year 2019, and nestled in among the usual blathering of record profits and unprecedented levels of digital sales was an interesting nugget on Games as a Service (GaaS). In particular, that spending on its FIFA 19 and Madden NFL 19 Ultimate Team modes has actually been lower than expected, resulting in EA revising its yearly forecasts downwards.
It’s a little bit of insight that flies in the face of the record digital net bookings and suggests EA may have come up against an upper ceiling limit on those willing to fork out on player card packs.
Unsurprisingly, both FIFA 19 and Madden 19 have still been selling like gangbusters. FIFA 19 is the biggest launch of the year in the UK, trumping even the mighty Red Dead Redemption 2. The problem is, and try to stifle those laughs, both of these games are too good and offer too many modes to play, slowing down engagement in the Ultimate Team modes. That’s not my words, but the words of EA CEO Andrew Wilson.
“With FIFA 19, we set out this year to create a game that expanded our core FIFA product, adding the UEFA Champions League and innovative new game modes,” says Wilson. “As we have seen previously when we have delivered innovative and creative new ways to play such as The Journey, FIFA players will jump into the new content first, and over time move into Ultimate Team. So far since launch, we have more players engaging across a great breadth of modes, from Career mode to Kickoff and Tournaments.”
Around 50% of EA’s entire Live Services income arrives from Ultimate Team modes, with live service earnings from the last quarter alone accounting for $328 million. Unfortunately for EA, making FIFA 19 and Madden 19 too feature-rich has meant the revenue forecast for the entire FY2019 has been revised downwards $450 million, dependant on whether engagement with Ultimate Team modes picks up during the next six months. It’s going out on a limb with this one, but EA believes more players will flock to Ultimate Team once they’ve exhausted FIFA 19’s other game modes.
“We now expect live services to be approximately flat to up 5% year on year, with growth driven by FIFA Ultimate Team,” explains EA CFO Blake Jorgensen. “This is lower than our original guidance, primarily due to reduced expectations for Ultimate Team, the delay of Battlefield V, and the FX headwind.”
As a long-time FIFA fan, I’m reading this as EA has inadvertantly provided too much entertainment. Players aren’t getting bored of the modes quick enough, and therefore are less willing to spend the cash on player packs for a quick dose of excitement. It’ll certainly be interesting to see just how this affects EA’s plans for FIFA 20.
Is this just a temporary blip for EA, or are we beginning to see a soft ceiling on how much revenue GaaS can earn? Could you see EA cutting game modes in the future in order to drive players towards microtransaction-driven modes? Let us know what you think below!