Board Thread:Game Discussion/@comment-29898480-20181230032623

Short answer: I don’t know, but not very

Long answer:

With some holiday time on my hands, I perused EA’s most recent 10-K filing, trying to figure out the answer to this question. [For those unfamiliar, US public companies like EA have to make an annual filing of their key financial results with the US Securities and Exchange Commission. This is called the 10-K, and it’s a publicly available document. The most recent 10-K covers the year 2017. The CEO and CFO can be personally held criminally or civilly liable for false or misleading statements in the 10-K, so it’s considered a trustworthy document.]

EA had about $5 billion in revenue in 2017 and showed about $1 billion in profit. This is good financial performance, and $5 billion is a lot of money. But for comparison, in my business, pharmaceuticals, it takes more than $10 billion in revenue to make the list of top-20 companies.

EA does not list revenue by game title. That said, I counted at least 14 titles that for one reason or other merited a specific call-out in the 10-K (list at end). Real Racing 3 was never mentioned. Similarly, they list about a dozen significant licensing arrangements, none of which involve motorsports.

EA does call out revenue by type and includes “Mobile” as a type. I assume RR3 falls under this category. Mobile accounted for ~$660 million in revenue, which is less than 15% of total revenue.

A revealing quote:  "…a significant portion of our revenue historically has been derived from games based on a few popular franchises, several of which we have released on an annual or bi-annual basis… "  RR3 is clearly not one of these franchises.

So based on the 10-K, RR3 is not a particularly important franchise to EA. It’s probably not getting much senior management attention at all.

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<p class="MsoNormal"><span style="font-size:10.0pt;line-height:107%;font-family: "inherit",serif">Specific games mentioned in the 10-K, for reasons both positive and negative (ie, falling revenue contribution).

<p class="MsoNormal"><span style="font-size:10.0pt;line-height:107%; font-family:"inherit",serif">FIFA; 17, 18, and Ultimate Team <span style="font-size:10.0pt;line-height:107%;font-family:"inherit",serif">

<p class="MsoNormal"><span style="font-size:10.0pt;line-height:107%; font-family:"inherit",serif">Star Wars; Battlefront II <span style="font-size:10.0pt;line-height:107%;font-family:"inherit",serif"> and Galaxy of Heroes

<p class="MsoNormal"><span style="font-size:10.0pt;line-height:107%; font-family:"inherit",serif">Madden NFL 18 

<p class="MsoNormal"><span style="font-size:10.0pt;line-height:107%; font-family:"inherit",serif">Battlefield; 1, 4, and Hardline 

<p class="MsoNormal"><span style="font-size:10.0pt;line-height:107%; font-family:"inherit",serif">Mass Effect: Andromeda 

<p class="MsoNormal"><span style="font-size:10.0pt;line-height:107%; font-family:"inherit",serif">Titanfall 2 

<p class="MsoNormal"><span style="font-size:10.0pt;line-height:107%; font-family:"inherit",serif">Need for Speed 2015 [the only motorsports mention in the document] 

<p class="MsoNormal"><span style="font-size:10.0pt;line-height:107%; font-family:"inherit",serif">The Simpsons Tapped Out 

<p class="MsoNormal"><span style="font-size:10.0pt;line-height:107%; font-family:"inherit",serif">The Sims FreePlay  <ac_metadata title="How important is RR3 to EA?"> </ac_metadata>