Why Electronic Arts shares rose 23% in the first half of 2020
Actions of Electronic arts (NASDAQ: EA) grew 23.5% in value in the first six months of the year, according to data provided by S&P Global Market Intelligence. It was much worse at one point, with the stock initially falling in March with the broader market as COVID-19 fears set in.
However, investors quickly turned to companies that could benefit from more people staying at home due to the coronavirus. EA has seen strong engagement through April in its biggest titles, including Apex Legends, FIFA, and Madden.
EA reported net bookings of $ 5.2 billion for fiscal 2020 (which ended in March), an increase of over $ 4.9 billion for fiscal 2019. The figures for the quarter ending in March do not reflect strong engagement trends in EA securities. Live services revenue, including in-game sales, fell 8% year-over-year, but management blamed the drop on the difficult comparison to the year-ago launch of Apex Legends. Excluding Mountain peak, the rest of EA’s titles saw an increase in spending on live services.
For the year as a whole, digital net bookings hit a record 78% of EA’s business, with strong spending in FIFA and Madden Ultimate team. EA also benefited from strong sales of Star Wars Jedi: Fallen Order, which now has over 10 million unique players.
EA announced at the end of May a new deal with nfl keep making soccer simulation games, as well as new mobile experiences. It comes like Madden NFL 20 just had a banner year in franchise history, with unique players up 30% year over year.
New consoles from Sony and Microsoft will launch this celebration, which historically gave video game actions an elevator. Other than sports titles, EA has nothing on the program this year except for Star Wars: Squadrons.
Management expects GAAP net sales to remain stable at $ 5.525 billion in fiscal 2021, compared to $ 5.537 billion in fiscal 2020. However, the next five years should include lots of new content to spur growth. On the last call, CEO Andrew Wilson said, “I don’t think we’ve ever had such a solid content pipeline in front of us as the one we have now. ”
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