EA Q3 2008 Financials (Platform Sales & SKUs)

[AlNom]

Source: http://investor.ea.com/phoenix.zhtml?c=88189&p=irol-newsArticle&ID=1102936&highlight=

                    Q3       Q4        Q1        Q2       Q3    YOY %
                   FY07     FY07      FY08      FY08     FY08   Change
                  ------- --------- --------- -------- -------- ------

PLATFORM NET
 REVENUE MIX
  PlayStation 2      400      117        61       73      301    (25%)
  Xbox 360           172       82        47      218      196     14%
  Wii                 29       36        29       59      139    379%
  PLAYSTATION 3       41       52        13       17      102    149%
  Xbox                62        7         3       12        3    (95%)
  Nintendo
   GameCube           32        4         1        3        1    (97%)
                  ------- --------- --------- -------- --------
    Total
     Consoles        736      298       154      382      742      1%

  PC                 218      128        89       79      148    (32%)

  Nintendo DS         55       27        25       47      122    122%
  PSP                118       39        21       21       74    (37%)
  Cellular
   Handsets           35       36        33       37       38      9%
  Game Boy
   Advance            21        3         2        4        2    (90%)
                  ------- --------- --------- -------- --------
    Total
     Mobility        229      105        81      109      236      3%

  Co-publishing
   and
   Distribution       49       45        39       33      320    553%

  Licensing,
   Advertising &
   Other              25       13         9       14       34     36%
  Subscription
   Services           24       24        23       23       23     (4%)
                  ------- --------- --------- -------- --------
    Total
     Internet
     Services,
     Licensing &
     Other            49       37        32       37       57     16%

                  ------- --------- --------- -------- --------
    Net Revenue    1,281      613       395      640    1,503     17%
                  ------- --------- --------- -------- --------
PLATFORM SKU
 RELEASE MIX (a)
  PlayStation 2        6        6         1        7        7     17%
  Xbox 360             5        4         2        8        5      -
  Wii                  2        4         2        5        7    250%
  PLAYSTATION 3        4        3         1        7        5     25%
  Xbox                 2        -         -        2        -   (100%)
  Nintendo
   GameCube            2        -         -        1        -   (100%)
                  ------- --------- --------- -------- --------
    Total
     Consoles         21       17         6       30       24     14%

  PC                   9        6         5        7        4    (56%)

  Nintendo DS          3        2         2        4        5     67%
  PSP                  5        2         1        3        4    (20%)
  Game Boy
   Advance             3        -         -        1        -   (100%)
                  ------- --------- --------- -------- --------
    Total
     Mobility         11        4         3        8        9    (18%)

                  ------- --------- --------- -------- --------
    Total SKUs        41       27        14       45       37    (10%)
                  ------- --------- --------- -------- --------

 

[AzBat]

Commentary with the CEO...

Riccitiello: "Short-term pain" necessary for further growth
http://www.gamesindustry.biz/content_page.php?aid=32654

Thank the lord for competition.

Tommy McClain

 

[Laa-Yosh]

More interesting is this one:
http://media.corporate-ir.net/media_files/IROL/88/88189/Q3FY08SupSeg.pdf

EA expects the PS3 to gather some serious momentum. Now why would they do that, is there something in the works that we don't know about; like a price cut?

 

[DJ12]

Blu-Ray winning must be a factor and the gap finally being bridged (in the main) for ports must be another.

At the risk of speaking out of turn (cause lets face it it's an entirely subjective viewpoint sometimes), the better looking PS3 only games could also be a contributor.

 

[Laa-Yosh]

They're expecting the PS3 to match the X360 in the US, and to outsell it by a factor of 3 in the EU. I can't see how a more expensive machine could do that, and I'd fully expect MS to drop the price in time for GTA. Not to menton catching up with the Wii, that prediction is more than interesting...

 

[Arwin]

More interesting is this one:
http://media.corporate-ir.net/media_files/IROL/88/88189/Q3FY08SupSeg.pdf

EA expects the PS3 to gather some serious momentum. Now why would they do that, is there something in the works that we don't know about; like a price cut?

It could be a great many things, but probably not something really new or unexpected to us. One possibility is that I think EA was involved in and showing support for Home very early on. They may also consider some of the big titles coming up for release this Spring. They may well expect a price-cut too somewhere this year ... 299 before Christmas, to me, seems a no-brainer. It could be anything, but most likely is the combination of factors.

Looking at the figures in the document you provided though (thanks, interesting), a major factor seems to be projections for Europe in 2008, where EA seems to expect the 360 to fall by the wayside compared to the Wii and PS3. Their combined expectations for US and EU put the PS3 clearly ahead of the 360 in terms of sales, and puts them at parity (give or take 1 million) by the end of 2008. In other words, they expect the 5 million lead of the 360 to remain stable in the US (but with growing market, it will become less significant), but the EU will begin to offset it significantly during 2008 (with a projected 2.9 million lead for the PS3 there by the end of 2008).

 

[Titanio]

I think the more challenging bit of that expectation is the improved NA performance. To start matching 360, more or less, would be some feat so soon.

Europe seems to be already swinging for PS3 now (vs 360). I think their estimate for 07 sales there for PS3 is rather conservative, actually. I can't shake the feeling that they simply added up the March launch shipment as announced by Sony (1.6m) and the number they announced for the last 5 months of the year (1.2m) to arrive at that 2.8m. Looking at other numbers we had reported from various territories, I would say the total is more than that. I don't know what margin PS3 will sustain over 360 in Europe, but I wouldn't be surprised to see it accelerate further in 08 there, relative to 360.

I think predicting anything about performance relative to Wii is fairly dangerous though. Wii seems to have commanding momentum (although thusfar not at the same kind of expense to PS3 and 360 as PS2 had to Xbox and GC).

 

[Laa-Yosh]

Why is the idea that EA could be totally wrong not even mentioned?

 

[Titanio]

Why is the idea that EA could be totally wrong not even mentioned?

I questioned their Europe number..and of course they could be wrong. It's just another set of estimates/predictions. But you asked for the thought pattern that might support them, not why they might be wrong.

 

[inefficient]

Wow at the income they are still ranking in from the PS2.

 

[iceberg187]

Why is the idea that EA could be totally wrong not even mentioned?

EA bet big on the PS3 before the launch of these consoles. Long held beliefs don't disappear too easily. That is the problem that I have with these predictions. The people that make them call them before they hit the market place, and when things go obviously wrong, they just stick with them. Like this

You look at that chart, then you look at the current marketplace then go WTF. For all I know, EA could end of right, but Microsoft, of all companies isn't going to go down without a fight. That said, with the seemingly lack of 360s in North America currently, if Sony doesn't outsell the 360 in January NPD, (I drove 2 hours for an Arcade a few days ago) I don't ever see the PS3 doing so.

 

[Teasy]

EA bet big on the PS3 before the launch of these consoles. Long held beliefs don't disappear too easily. That is the problem that I have with these predictions. The people that make them call them before they hit the market place, and when things go obviously wrong, they just stick with them. Like this

Is that a current prediction or one made before all consoles were released? If its current then I can only imagine EA are not only in denial but clinically insane throughout

 

[inefficient]

Is that a current prediction or one made before all consoles were released? If its current then I can only imagine EA are not only in denial but clinically insane throughout

It's from 2006 before all the console launched. And it's not EA's prediction. It's Screen Digest's.

 

[zed]

ps2 is still selling the most software by a large margin, which is a bit of a surprise

those EA estimations look very conservative eg ps2 europe 1.7->2.2million (it'll prolly do at least 5million)
though i do agree with the general consensus.
in 2008, US xbox to outsell the ps3 ~20%, in europe the ps3 to outsell the xb ~2.5x (scarily for MS the xb360 is estimated to have sold less in 2007 than in 2006 ), in asia to ps3 to outsell the xb by ~5x == the ps3 will overtake the xb360 WW in sales this year.
the wii will outsell both the ps3+xb360 combined though

if Sony doesn't outsell the 360 in January NPD, (I drove 2 hours for an Arcade a few days ago) I don't ever see the PS3 doing so

i dont expect them to in jan, i wouldnt be surprised by the middle of the year though. as ive said all along, home is sony's major ace up their sleeve

 

[iceberg187]

ps2 is still selling the most software by a large margin, which is a bit of a surprise

those EA estimations look very conservative eg ps2 europe 1.7->2.2million (it'll prolly do at least 5million)
though i do agree with the general consensus.
in 2008, US xbox to outsell the ps3 ~20%, in europe the ps3 to outsell the xb ~2.5x (scarily for MS the xb360 is estimated to have sold less in 2007 than in 2006 ), in asia to ps3 to outsell the xb by ~5x == the ps3 will overtake the xb360 WW in sales this year.
the wii will outsell both the ps3+xb360 combined though

i dont expect them to in jan, i wouldnt be surprised by the middle of the year though. as ive said all along, home is sony's major ace up their sleeve

I'm still not sold on Home. About Microsoft, they shipped more consoles in 2006, but they sold more consoles in 2007. They were determined to hit 10 million shipped at the end of 2006.

 

[Laa-Yosh]

I just can't see the PS3 closing a gap of 6-7 million units within one year. It's incredibly unlikely to happen, it'd take a 180 degree turn in customer mindset.

 

[betan]

I just can't see the PS3 closing a gap of 6-7 million units within one year. It's incredibly unlikely to happen, it'd take a 180 degree turn in customer mindset.

EA estimates only 3.5 million more PS3s compared to 360s for Europe , 0 for NA, no mention of Japan or Asia.
How do you get 6-7 million?

 

[Readykilowatt]

Then... [07-24-2006]

“I don’t want to be indiscreet, but the truth is EA is most committed to the platform with the biggest installed base (Sony)…One of the things that we noticed after E3 is we thought, you know, we’re going to support Nintendo, they’ve got an extraordinarily loyal base of consumers all over the world, and we had a number of games we planned to make for Nintendo Wii. That said, we were very surprised by the level of enthusiasm we saw at E3 and subsequently for the Wii.”

“This is not a business plan, but there are a lot of people at EA who are walking around whispering: “40 / 40 / 20 per cent.” The last time out, it was 65-70 per cent PlayStation, and everybody else divided up the 30 per cent that was left. Microsoft obviously took a big piece. Now it looks like 40 / 40 / 20 - Microsoft, Sony and Nintendo - and that is good for us, and it’s good for people who like games.”

“Let me tell you, if they get up to 20 per cent worldwide, that is a momentous event right there. Look, I’m not predicting it’s 40 / 40 / 20, and I hope you understand that is not EA’s business model - I’m just telling you that the buzz going around is that rather than this huge, lopsided victory for one, and then a pretty good number two and a distant third, you can see some parity for the top two. You could even see 30 / 30 / 30, something like that.”

Now... [February 1st, 2008]

EA recently made a prediction that the Nintendo Wii would continue to dominate in 2008, to no surprise. One startling guess that they have made, however, is that the PlayStation 3 would outsell the Xbox 360 by a large margin.

According to the predictions, the Wii would outsell both of its competitors soundly, with an estimated 12-14 million units this year. Very solid numbers compared to Sony and Microsoft's projected sales of around 10 and 7 million respectively. So, according to EA, the PS3 will sell about three million more consoles this year than the 360.

 

[inefficient]

EA estimates only 3.5 million more PS3s compared to 360s for Europe , 0 for NA, no mention of Japan or Asia.
How do you get 6-7 million?

EA games don't sell that well in Japan.

I did see an entire train in Tokyo dedicated to NFS Pro Street last week though. So they are doing so major advertising for that game. Inside this train on the Yamanote line the it was 100% NFS advertising plastered everywhere.

The only other time I've seen gaming related ads literally take over a whole train was for the 360's launch. Nintendo and Sony don't have to use these tactics because they are already in the minds eye of consumers. Foreign companies like EA and MS have to use these tactics just to generate public awareness.

 

[Laa-Yosh]

It's what zed seems to be thinking...