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Electronic Arts Inc.
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At a Glance

Uppers

Competitive salary

Ability to work on latest video games

Downers

Many positions require extensive overtime hours

The Bottom Line

EA is an industry leading video game developer with moderate employee satisfaction. ?

About Electronic Arts Inc.

Electronic Arts (EA) puts gamers in action on the gridiron, the pitch, the battlefield, and in outer space with its most popular games. Its leading titles are Madden NFL, FIFA, and Star Wars, all of which it licenses from other companies, and its own Battlefield, Mass Effect, and The Sims. While EA generates increasing sales for games on mobile devices, it still makes most of its revenue from games played on consoles from Sony and Microsoft and on personal computers. The company is moving into competitive gaming and eSports with its Competitive Gaming Division. EA gets about 60% of revenue from international customers.

Operations

Electronic Arts collects revenue from sales of its games on disc, digital downloads (onto several platforms), subscription fees, and in-game transactions.

Digital has become increasingly important for EA, bringing in more than 75% of revenue. Digital revenue includes Live Services, 45%, Mobile, about 15%, and full game downloads, about 15%.

Live Services offers extra content for consoles, PCs, and browser games; game software licensed to third-party publishers; subscriptions; and advertising. 

Mobile, about 15%, offers full games and extra content on mobile and tablets.

Full game downloads include revenue from digital sales on consoles and PCs.

Packaged goods account for about 35% of revenue. Packaged goods include game shrink-wrapped software sold through traditional channels such as brick-and-mortar retailers. 

Perennially popular games are FIFA, Madden NFL, Star Wars, Dragon Age, Battlefield, and The Sims. FIFA is a top seller, generating some 15% of the company's revenue.

Geographic Reach

California-based Electronic Arts operates development studios in North America and leases properties for R&D, sales, and administration in Europe and Asia. North America is its largest market, accounting for more than 40% of sales. International customers supply the rest.

Sales and Marketing

As Electronic Arts' business becomes increasingly digital, more of its sales are generated through the internet. Such channels include Origin, the company's direct-to-consumer platform, digital downloads from third-party retailers, and mobile applications.

EA depends on two major console makers for about 45% of revenue. Games for Sony's PlayStation supply about 30% of sales and games for Microsoft's Xbox account for about 15% of sales. EA also sells packaged games to retailers, including mass merchants (Walmart), consumer electronics stores (Best Buy), and specialty game shops (GameStop). EA has partnerships with Tencent Holdings Limited in China and Nexon Co. Ltd.

Financial Performance

Electronic Arts’ revenue has fluctuated in recent years, generally based on the timing of game releases.

Its performance in 2019 (ended March) was no exception with revenue dipping to $4.9 billion, about $200 million less than 2018’s revenue. Lower sales of the Battlefield franchise and Mass Effect: Andromeda reduced revenue about $635 million, while the FIFA and The Sims franchises recorded stronger sales. Digital sales rose about 8% in 2019 over 2018 on increases in live services and mobile revenue, but sales of full game downloads fell. 

EA posted a profit of about $1.02 billion in 2019 compared to $1.04 billion in 2018. It had higher expenses in 2019, but a lower tax bill than in 2018, which was affected by the US Tax Cuts and Jobs Act.

Electronic Arts had $4.7 billion in cash at the end of 2019 compared to $4.2 billion at the end of 2018. Operations produced $1.5 billion in 2019 and investing activities provided $169 million, while investing activities used $1.21 billion.

Strategy

Electronic Arts has perennial moneymakers, FIFA, its soccer series, Madden, its NFL game, and The Sims. The company’s challenge is to develop new franchises that open with a bang and deliver recurring revenue.

Its recent release, Apex Legends, a free-to-play game, was the fastest-growing new game EA has released, hitting 50 million players in what the company called a short time. Some 30% of the game’s players were new to EA.

The release of Anthem in February 2019 did not measure up to players’ or EA’s expectations. The game, developed by EA's Bioware subsidiary, received tepid reviews amid complaints about lack of depth and variety as well as bugs. EA has promised to address players’ concerns in updates.

Despite those travails, EA’s player base grew to more than 500 million active player accounts in its 2019 fiscal year, driven by its top franchises, live services on major platforms, and Apex Legends.

As EA looks for more blockbuster games, it has ample cash, about $4.7 billion at the end of 2019, to buy rising gaming companies.

To improve internal operational efficiently, EA has moved nearly all of its development activity to one game engine. This allows the company's developers to work across platforms, which in turn accelerates development and streamlines technology operations.

Mergers and Acquisitions

In late 2017 Electronic Arts acquired independent game development studio Respawn Entertainment LLC, creators of AAA shooter and action games, including the critically acclaimed Titanfall franchise.

Company Background

After four years with Apple, video game pioneer Trip Hawkins left in 1982, raised $5 million, and founded Electronic Arts to explore the entertainment potential of PCs. The company went public in 1989, and sales exploded the next year when EA began designing games for SEGA's Genesis video game system. Hawkins stepped down as CEO in 1991 and was replaced by president Larry Probst. (Hawkins remained chairman until 1994; he left to devote time to another game company, 3DO, which later went bankrupt.) The company bought game developer ORIGIN Systems in 1992 and began marketing its games in Japan with partner JVC. That year Sony introduced its PlayStation game system in the US.

Electronic Arts Inc.

209 REDWOOD SHORES PKWY
Redwood City, CA 94065-1175
Phone: 1 (650) 628-1500

Stats

Employer Type: Publicly Owned
Stock Symbol: EA
Stock Exchange: , NASDAQ
EVP and CFO: Blake J. Jorgensen
Executive Chairman: Lawrence F. Probst
CEO: Andrew Wilson
Employees (This Location): 475
Employees (All Locations): 9,700

Major Office Locations

Redwood City, CA

Other Locations

Concord, CA
Los Angeles, CA
Pasadena, CA
Orlando, FL
Louisville, KY
Baton Rouge, LA
Minneapolis, MN
New York, NY
Pearl River, NY
Shanghai, China
Burnaby, Canada
Montréal, Canada
Braine-L'Alleud, Belgium