Electronic Arts Inc. (NASDAQ:EA) Q3 2024 Earnings Call Transcript

We’ll continue to lean and focus on those across our biggest opportunities through whether it’s FC, Madden, Sims, Battlefield and beyond. Second part is we continue to look for the biggest hits in IP and opportunities that can stand alone on mobile itself. Wrapped inside of an incredibly disciplined approach as we’ve focused on driving profitability across this platform to some of our more historic levels versus the past. So, those are three kind of profiles we expect. So yes, quarter-over-quarter sequential improvement, strength overall year-on-year with plus 5% and a diligent strategy and approach from us around our biggest opportunities on ecosystems, IP within the platform with mobile itself, and obviously disciplined P&L performance around the business.

Eric Handler: Thank you very much.

Katie Burke: Thank you, Eric. Operator, next question, please.

Operator: Our next question comes from Brian Pitz with BMO Capital Market.

Brian Pitz: Thanks for the question. Andrew, we’ve seen reports that sports leagues like the NFL and NBA considering ownership stakes in the likes of ESPN. Obviously, EA has one of the most valuable audiences in sports. Just curious, are there opportunities for EA to partner more closely with these leagues? And also from another dimension, I guess, how do you think about this opportunity as the NFL and other leagues embrace sports betting? Is there a real money gaming opportunity? I know the industry has looked at it in the past, but I think we’re in a new place now going forward? Thanks.

Andrew Wilson: Yes, again, great questions. I think the relationship between the NFL and the NBA and the likes of ESPN, is super interesting to us. I would think about this on two vectors. One, we have incredible relationships with our sports leagues. Many of them we’ve had for over 30 years and they have evolved with us, and we have evolved with them. A big part of what we have done through the rebrand of FC, is actually gotten significantly closer to our European Football League partners. And much of what we’ve done as we have renewed and bolstered those relationships for the next decade, and beyond is really think about, how we can come together in service of fans more broadly, not just fans in the context of interactive gameplay.

And part of what you’re seeing here as we start to bring highlights into our games and really think about FC as a platform, is kind of testament to that evolution of the nature of our relationship. I do believe that we have the opportunity to do the same, with the NFL and the NBA and you should imagine that we’re working very closely with all of our league partners, NHL, UFC, F1, and we see a tremendous opportunity to really think about, EA SPORTS as a platform for engagement, and how we might grow in service of our fans, with our league partners. I would also highlight we’ve had a relationship with ESPN for the best part of 30 years and have worked very closely with them and continue to work very closely with ESPN and the Walt Disney Company as we think about the future of entertainment broadly.

And so, we feel very good about our position in this future. We feel very good about the connection we have with the fans. We feel very good about our opportunity to grow our business as a result of this evolved service opportunity we have with them.

Brian Pitz: Thank you.

Katie Burke: Operator, next question please.

Operator: Our next question comes from the line of Andrew Marok with Raymond James.

Andrew Marok: Thanks for taking my questions. I wanted to dig into a couple of things on the recent Apex event this last month with FINAL FANTASY. So commentary sounded really good in the prepared remarks, but with the dynamic that versus prior collection events, it was maybe less expensive for the first few items, but more expensive to complete. How did that affect payer dynamics and what are some of the key learnings coming out of that event for you guys?

Andrew Wilson: I guess – at a macro level we’re really, really happy with that event. It was very well received by the community and it actually performed incredibly well. And certainly as we were in what was a very, very competitive quarter, there were a couple of competitive titles that, actually did some really unique and interesting things in the quarter. And so, the performance of Apex with that collection event in the context of some of these other unique things happening in the competitive landscape. We think shows tremendous promise for how the franchise continues into Season 20 and beyond. I’ve spent a lot of time with the team lately. The team are very committed to the game. They’re very committed to the community.

They’re working diligently to offer new types of content and new types of mechanics into the game. And they’ve put tools in place to test those meaningfully to ensure that, both they’re enhancing gameplay. But also that they’re fulfilling the needs and motivations of the community. And I’m very encouraged by what we saw out of that collection event. And I’m very encouraged as we go into Season 20 and all the new and interesting things that the team’s doing.

Andrew Marok: Great. Thank you. You kind of led into what was going to be the next part of my question. So, we’ve seen Apex do some smaller crossover events in the past, but how did the FINAL FANTASY partnership specifically kind of come about? And with the increasing intent kind of in the rest of the states, as you hinted at for a lot of these cross media partnerships, how much room and intent, is there for more of these more substantial crossovers within Apex?

Andrew Wilson: Yes, I think we’re still learning and the team is now thinking through, what that might look like. Remember, Apex is this incredible game that has attracted hundreds of millions of people to play. That’s tremendous retention in its core. And underneath that core gameplay, which is incredible and what Respawn is known for, is also tremendously deep lore about who these characters are, where these characters come from, and how those characters interact in the world. And so, we have to be very thoughtful about any brand crossovers that we do, to make sure that we’re not impeding on the authenticity of the characters or the game in any way. What I think the Final Fantasy crossover did was actually open our eyes to the kinds of things that are possible, and the kind of things that will be super well received by our core fan base and new fans alike.

And how that lines up with the core law of the game. And so I would expect that we have more opportunities to do this in the future. But I would also expect that the team will continue to protect both the core game play, the core character set and the core law in the world, what this event does show is we have probably more ability to do things in that direction than we may have thought previously.