EA Makes $1.3 Billion A Year On Extra Content
By Cody Gravelle 26 February 2016
EA chief financial officer Blake Jorgensen reveals that EA makes over a billion dollars a year directly from extra content alone, with half coming from one series alone.
Jorgensen made the claim while speaking at an investor conference earlier in the day, detailing the successes of EA‘s extra content category, which includes things like map packs, season passes, and other microtransactions. According to Jorgensen, the company’s decision to prioritize extra downloadable content for each of its big releases has been one of the most profitable in recent memory. Jorgensen said during the conference:
“The extra content business is a billion-three [$1.3 billion] a year…half of that is roughly our Ultimate Team business.”
Although the news that EA is making a lot of money from DLC is nothing particularly surprising, the amount is staggering, and it continues to be driven by the Ultimate Team microtransaction service within each EA Sports franchise. Ultimate Team is the largest contributor to the earnings in extra content, and is key to the NHL, Madden, and FIFA franchises. Ultimate Team allows players to buy, trade, and sell player cards to each other for real or in-game money.
For what it’s worth, Jorgensen believes that the explanation for the success of Ultimate Team is simple. He believes that it’s human nature for people to want to collect and trade, but that the driving force behind Ultimate Team is that players will “typically pay money to beat their friends”. That competitive spirit is likely made even more intense by the nature of the EA Sports franchises.
The other categories of digital revenue that exist under the giant shadow of the Ultimate Team juggernaut include mobile ($650 million), subscription services ($300-400 million) and digital downloads, which, while not as impressive financially as the other categories, account for 25 percent of game copies sold overall. Those figures might be part of the reason EA is skipping E3 2016‘s traditional showfloor for an online showcase of the company’s games a day before the actual event.
While the extra content numbers are financially significant to EA and shouldn’t be discounted, the publisher is in line for another prominent few years at the top of the video game industry whether fans like it or not. While it’s still a ways off, EA will be releasing Mass Effect: Andromeda in early 2017, and Electronic Arts is likely going to reveal more information about a new Battlefield title and Titanfall 2 by the time its EA Play livestream rolls around in June.
What do you make of EA’s obscene profit margins on extra content? Does the way DLC has become so heavily marketed towards gamers bother you, or are you happy with more content regardless of cost? Let us know in the comments below.
Source: IGN
