EA net revenues per console

[Nesh]

http://investor.ea.com/phoenix.zhtml?c=88189&p=irol-newsArticle&ID=1180823&highlight=


I must say I am surprised by the sudden improvement of PS3 software sales

 

[Rangers]

How can PS3 be trumping 360 ? Does that even make sense?

Is there an explanation along the lines of, delayed games already out on 360 now recently released on PS3 in the last few months?

Hmm, this is interesting, I dont know if it's completely true..

http://www.neogaf.com/forum/showpost.php?p=12187261&postcount=129

This is misleading - the PS3 is not dominating the 360 in revenue.

If you scroll down in that statement you will see the more accurate numbers in the "non-GAAP revenues" section, and the PS3 definitely does not lead the PS3.

Xbox 360: 81
PC: 70
PS3: 68
PS2: 40
Wii: 39
PSP: 26
DS: 21

Why the difference? EA bundles together the revenue for microtransactions together with the software - the revenue numbers above are not just from SKUs shipped to stores, but the actual and future expected values of online purchases for those games.

There is a big difference in how EA handles those numbers for the 360 and DS and all other platforms.

For the DS, there is no estimation necessary - there are no DS microtransactions. For the 360, there is a special case - EA feels that, by working with Microsoft, they can accurately gauge the total number of microtransactions that are going to occur for a title at the time it is shipped. This is probably because Microsoft shares with them online sales data for other titles - or perhaps Microsoft is delivering them money upfront and not on a per-sale basis.

For all other platforms, EA does not have confidence in what the microtransaction revenues will be at the time of shipment. So what EA has started doing this year is recognizing over a 6 to 9 month period the expected online revenue for these games. It does this only for the official GAAP revenue numbers. For the non-GAAP numbers - EA continues to estimate the microtransaction value as the game is shipped, because they will not be audited for those numbers.

So why is the GAAP PS3 revenue number this quarter so large? It's not because they are getting more money from PS3 games sold in stores than the 360. It's because estimated microtransaction values of PS3 games sold Christmas last year are still showing up in the official revenue numbers this quarter - but the 360 revenue numbers recognized those values when the games were sold 2 quarters ago.

The OP should probably be updated to include the non-GAAP numbers as well.

Also, microtransactions = serious business.

 

[DrJay24]

So if you strip "non-GAAP" revenue the PS3 number comes down... why doesn't the 360 one? I thought it was partially based on future "non-GAAP revenues". I'm not a financial guy, but someone is running a shell game.

 

[Mize]

Uh...GAAP doesn't allow you to count stuffing the pipeline. product in distribution centers or on retail shelves can be counted in "non-GAAP" numbers but GAAP numbers have to be incustomer's hands.

 

[wco81]

http://investor.ea.com/phoenix.zhtml?c=88189&p=irol-newsArticle&ID=1180823&highlight=


I must say I am surprised by the sudden improvement of PS3 software sales

Europe and Japan?

In the press release, they cited sales of Battlefield Bad Company and UEFA 2008.

I guess EA games aren't big in Japan but UEFA would be big in Europe and maybe Asia and Australia as well?

Maybe Sony's claims about doing better in Europe weren't just hype.

 

[betan]

Uh...GAAP doesn't allow you to count stuffing the pipeline. product in distribution centers or on retail shelves can be counted in "non-GAAP" numbers but GAAP numbers have to be incustomer's hands.

Revenues that come from retailers/distributers are certain, so shouldn't they be included in GAAP numbers?

 

[Rangers]

Theres more discussion about it if you continue on in that GAF thread, and more questions. It seems in the past the non-GAAP number has likely been more reliable. For example, the Q that 360 led PS3 in software revenue 218 to 17, the non GAAP had it 218-98 which seems more likely (Madden PS3 released that Q).

The truth may be somewhere in the middle, but I wouldn't accept those GAAP (or Non-GAAP either, perhaps) numbers at face value, they appear fishy, even if PS3 is say, totally dominating in Europe.

 

[Arwin]

I thought the explanation was more in the numbers and iterations game. Look at the sales of the first Madden release on 360 versus the sales of the second release. Same thing for all the other yearly releases. They resulted in incredibly high numbers (200+) for EA for a few quarters. The PS3 is just now playing catchup, with lots of people buying that first next-gen version.

 

[wco81]

What motive would EA have for overstating PS3 numbers?

In the US at least, they're going to be advertising Madden with MS co-op money.

 

[Carl B]

EA wouldn't be overstating the PS3 numbers - whether GAAP or non-GAAP, the numbers are going to reflect their honest assessment of the situation using each set of criteria.

 

[liolio]

Could someone explain me what means GAAP and non GAAP?
thanks

 

[cychris]

Generaly Accepted Accounting Principles i think is GAAP.

 

[wco81]

Wait, that press release lists actual numbers, not forecasts.

                         Q1      Q2      Q3      Q4      Q1     YOY %
                        FY08     FY08    FY08    FY08    FY09  Change
                       ------- ------- ------- ------- ------- -------

PLATFORM NET REVENUE
 MIX

 PLAYSTATION 3              13      17     102     152     139    969%
 Xbox 360                   47     218     196     128      81     72%
 PlayStation 2              61      73     301     166      79     30%
 Wii                        29      59     139      75      57     97%
 Xbox                        3      12       3       1       -  (100%)
 Nintendo GameCube           1       3       1       -       -  (100%)
                       ------- ------- ------- ------- -------
  Total Consoles           154     382     742     522     356    131%

Or are you saying in the numbers above, Q4 FY08 and Q1 FY09 are forecasts, not actual numbers?

What is EA's fiscal calendar?

Elsewhere, I thought I saw that FY09 ends 3/31/09. So the June quarter we just completed is their Q1 FY 09 isn't it?

Which leads one to believe that those are actual numbers, not just best "assessments."

 

[Carl B]

Elsewhere, I thought I saw that FY09 ends 3/31/09. So the June quarter we just completed is their Q1 FY 09 isn't it?

Which leads one to believe that those are actual numbers, not just best "assessments."

Many companies state their fiscal year 'forward' of the actual calendar year, so EA is in fiscal 2009 right now.

The non-GAAP numbers contain a different take on the financials to provide investors with additional information. Even though the GAAP numbers are the 'official' numbers, the rules surrounding GAAP sometimes obscure information that may be important.

The quoted text in Rangers' second post of the thread speaks to how EA is accounting for both GAAP and non-GAAP in this particular instance.

 

[wco81]

Interestingly, the GAAP numbers show more revenues for PS3 while the non-GAAP numbers show more for the X360.

Yet if you look at the Q3 FY08, which was the December quarter (much bigger than the June quarter), under GAAP, X360 is higher but under non-GAAP, they are at parity. Goes against the theory about microtransactions because you would think XBL gets much more microtransaction revenues than PSN.

Especially back last winter, when the gap between the number of XBL members as well as overall X360 ownership vs. PSN members and PS3 owners was greater than it is now.

The other thing that stands out is how much the geographical revenue mix fluctuates from quarter to quarter. The NA revenues range from 40-60% of total revenues while the European revenues range from 40-50%.