Video games enjoy annus superbilis as lockdown entertainment booms


New York is host to most of the top-tier game developers including Electronic Arts Inc (NASDAQ:EA).

While for most business it has been a frankly horrible year, for the video games industry 2020 has been a bona fide breakthrough moment.

For many months of the year, people could legitimately consider themselves heroic for sitting at home on their couch.

These heroes did not wear capes. They evidently watched Netflix and played video games, protecting their loved ones all the while.

In March, Electronic Arts social media ad campaign – “Stay Home. Play Together” – was as much an instructive piece of public service as it was a promotion of the online gaming community that powers EA’s lucrative in-game monetisation model (more about that later).

 

It would become clear as the year progressed that EA’s marketing department was very much on the nose with its messaging.

Soaring gameplay numbers in lockdown

As financial results industry-wide were rolled out quarter after quarter they revealed soaring growth in user numbers, playtime and crucially digital-based revenue.

In November, for example, EA’s Q2 statement boasted of a “well above guidance” performance which it highlighted as being driven by ‘live services’ – ie in-game transactions – and marked a new company record for cash generation.

Net bookings were up 8%, at US$5.77bn over a trialling twelve-month period.

The ‘EA Play’ subscription service, which allows gamers to access EA’s back catalogue for £19.99 per year, now counts some 6.5mln paid subscribers.

It highlighted at the same time that Madden NFL had increased its user base by 30% year-on-year whilst FIFA 20 had seen 35mln players since its launch in late 2019 (and the 2021 version was launched in October).

Factoids stripped out of EA’s investor relations bumf is impressive though not unique across the sector.

Activision, Ubisoft and TakeTwo all level up

Similarly, Activision Blizzard in late October reported US$1.9bn of net revenue for its third quarter, up from US$1.2bn in the same three months of 2019.

The Activision unit, which houses the massive Call of Duty franchise, counted 111mln monthly unique users (MAUs) in the quarter – that’s three times as many as the comparative for 2019. Counted in hours played, player engagement was up seven times.

On the Blizzard side, which runs subscription-based online fantasy game World of Warcraft, there were 30mln MAUs and King, the Candy Crush mobile gaming subsidiary, had 249mln MAUs.

Paris headquartered Ubisoft, meanwhile, in its recent half-year results, reported 100mln ‘unique players’ – more than 65mln of which came via online shooter ‘Tom Clancy’s Rainbow Six Siege’  which, according to Ubisoft, has generated €2.5bn…



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