With the current generation of consoles approaching end of life, and not much announced officially about releases in the coming year for next-genartion consoles, it’s no surprise that investors are beginning to worry about income for EA. Turns out, EA isn’t all that worried about the situation because, for the first time in its history, digital sales are covering a large chunk of the burden.
EA CEO John Riccitiello on the bizarre twist, according to AllThingsD:[quote]In the face of, unfortunately, somewhat of a headwind relative to console, we’re getting top line growth, robust digital growth, robust margin expansion, robust EPS growth, while affording the investment in the next-gen console. I don’t think, going back to our foundation in ’82, that’s ever happened before. So what we are guiding for is entirely unprecedented, and it’s a function of everything we’ve been saying on the call so far. … It’s our hope to be able to accelerate top line through a transition and accelerate bottom line growth through a transition because we won’t be facing sort of negative console compares.[/quote]
The earning report has indicated that EA has seen an increase in digital sales to the tune of 47 percent year over year, bringing in over $1.2 billion in 2012. EA is expecting these numbers to increase to a whopping 1.7 billion this year.
If you’re left wondering exactly where the industry is heading these days, you may want to spend some time getting to know mobile gaming platforms. While next generation consoles will obviously do well in the near future, a lot of people have taken to gaming while on the go. The iPhone and other mobile devices may never convert hardcore gamers to mobile platforms, but what it has done is put games back in the hands of a lot of people who managed to let gaming slip through their fingers as they go about their life. Maybe the next generation consoles will equal or surpass mobile gaming revenues in the next couple of years, and maybe they won’t. If anything, it’s an interesting time to keep an eye on the industry because a monumental paradigm shift may be just over the horizon.