EA talks revenue from esports microtransactions, three incoming game franchises
EA is still feeling some backlash from the Star Wars Battlefront II loot box controversy, but the FIFA and Battlefield publisher has its eyes set on the future already. In a conversation between EA's CFO Blake Jorgensen and global financial firm Morgan Stanley, EA opened up about its future plans for content monetization and franchise publishing.
In a report obtained by Dot Esports, Morgan Stanley felt confident about Battlefront II's sales, citing "multiple content updates to be released over the next few weeks," related to an "additional single-player campaign" and The Last Jedi DLC. Overall, Battlefront 2 is projected to sell 13 million units by Q3 of 2018's fiscal year, mirroring the original Star Wars Battlefront's sales.
EA also believes 60 to 70 percent of all game purchases will be downloaded in the coming five years. Throughout 2017, around 35 percent of console games sold were downloaded in full via digital distribution platforms, so it's safe to say EA believes physical retail will diminish as digital games take control of the market.
This coincides nicely with EA's focus on microtransactions and in-game monetization, too. Morgan Stanley reveals that EA's Ultimate Team trading card mode—available in both NFL Madden as well as FIFA—made the company over $830 million in adjusted revenue during 2017's fiscal year. Around 50 percent of all Ultimate Team players also spent money on microtransactions.
Previously, Jorgensen said that EA is moving to a model where players download games digitally via Origin Access and EA Access' subscription service, then proceed to spend money in-game on items. In this case, Ultimate Team sounds like a prime candidate. EA points out an esports mode in Ultimate Team, which the company believes served as a source for the mode's revenue intake. In short, players paid to win.
Lastly, Morgan Stanley reveals that EA has three franchises planned in the five years ahead. Anthem is slated for fiscal year 2019, there's an action title that Jorgensen previously hinted at coming for fiscal year 2021 or 2022, and then there's a Star Wars action game in the works.
It's likely that EA will continue to expand its monetization model, in part because Jorgensen has previously praised in-game purchases. But Morgan Stanley does fear that consumers "may reach monetization fatigue" which could cause "extra digital content growth [to] slow." It remains yet to be seen if EA will revise microtransactions in a way that makes purchasing them less controversial, although it's a sizable risk after Battlefront II's original backlash.
Until then, Star Wars Battlefront II is available now for Xbox One, PlayStation 4, and PC.