Popular game publisher Electronic Arts reported better-than-expected earnings during the first quarter with a 51 percent jump in profit from a year ago.
While smartphone makers struggled to keep up their earnings up to the mark, game publishers enjoyed a profitable quarter. Electronic Arts, the renowned video game publisher, had a splendid first quarter as it reported a 51 percent jump in profit compared to the same period last year. The profits were driven by the strong sales of titles like Titanfall and FIFA 2014, EA said in its first quarter earnings call, Tuesday.
The transcript of the EA earnings call reported $335 million in profit between April and June, up from $222 million it reported a year ago. EA reported total GAAP net revenue of $1.21 billion, which is up roughly 28 percent from $949 million a year ago. Non-GAAP net revenue during the first quarter was up 57 percent from $495 million in the same quarter a year ago, at $775 million.
Electronic Arts also noted in its conference call that the launch of its title "Battlefield: Hardline" is being pushed to early next year. It was originally pegged for an October release. The game publisher wants to utilize the additional time to improve the game to meet gamers' expectations after receiving feedback and suggestions from beta testers.
The company witnessed a spike in revenue from gaming on smartphones and tablets, which rose 18 percent to $120 million during the quarter. EA's freemium model for the games, which offers the content for free but charges to unlock special features, worked well in its favor. But the OS providers like Apple and Google were criticized for offering in-app purchases. The European Commission ordered the two tech titans to comply with EU regulations for their app stores, which includes removing the "free" label from apps and games that offer in-app purchases.
The freemium model or the digital extra content and advertising revenue boosted 39 percent compared to the same period the prior year. EA said $105 million or 87 percent of the mobile revenue came from freemuim subscriptions, which is setting a new business trend.
Digital downloads on PC and consoles grew massively, up 90 percent from a year ago. Titles like Titanfall, Battlefield 4 and FIFA 14 primarily contributed towards $71 million made from full game downloads.
