EA: 63% of Q2’s $898 million in game revenues were digital

After years of digital threatening to replace physical discs in the gaming industry, it’s looking like that time is here and now.

Electronic Arts generated $898 million in revenue during the second quarter of its fiscal 2017, and $566 million of that — or 63 percent — was digital. During the same period last year, EA reported that 62 percent — or $502 million — of $815 million in revenues were digital. In a global gaming industry that is worth more than $99.6 billion across every platform, digital sales are growing fast.

EA is taking advantage of that.

“Net sales in the quarter were better than expected driven by outperformance in FIFA, and supported by strong year-on-year growth in mobile,” Electronic Arts chief financial officer Blake Jorgensen said in a statement to investors.

Above: A look at net sales.

Image Credit: EA

When looking at digital sales for EA’s Q2, which is $486 million (the $80 million difference is due to revenues counting future cash that is promised but not yet delivered), you can see that mobile is one of EA’s fastest growing digital segments. That is likely why the company rededicated itself to FIFA Mobile recently with a version of the soccer sim that runs well on underpowered phones connected to slow networks.

At the same time, we can see that full-game downloads only grew by 4 percent. In the last year, however, those digital sales are up 19 percent compared to the preceding 12 months. This is indicative of more gamers on PlayStation 4, Xbox One, and PC buying their games through a digital portal. At the start of this generation, around 10-to-15 percent of new game sales (at least the $60 blockbusters) were digital. That average jumped to around 20 percent over the last several years. For EA, however, that ratio is approaching 25 to 30 percent.

Finally, extra content is still the biggest generator of digital revenue even though it dropped 12 percent in Q2 year-over-year. While this includes things like map packs and game expansions, EA makes most of this cash from microtransactions for items like card packs in the Ultimate Team modes in FIFA, Madden, and NHL. That’s a game type where fans can build out dream teams of professional players by collecting cards. You can then take those squads online to compete. Collectively, Ultimate Team is up 15 percent in the trailing 12 months year-over-year in FIFA, Madden, and NHL.

Looking ahead, EA is expecting more digital success from its recently launched Q3 shooters Battlefield 1 and Titanfall 2. FIFA Mobile is also the top downloaded iOS game in 138 countries. With those kinds of games leading the way, the company should have no trouble reaching its fiscal 2017 guidance of $2.8 billion in digital revenues.