Electronic Arts Inc. (EA) Earnings Call Transcript & Summary

Please welcome CEO of Electronic Arts, Andrew Wilson.

Good morning, good afternoon, and good evening. Welcome to Amsterdam, considered by many to be the birthplace of modern football. And tonight, I hope you'll agree we're going to take another giant leap forward. As I look at the audience, I see a lot of familiar faces, people who have been on this journey with us for more than 2 decades. And another what we have on the livestream is many, many millions of people around the world who have contributed maybe in the most important way by playing our game, competing with each other, enjoying the thrill of victory and the agony of defeat, as part of our EA SPORTS football experiences. To quote many great people who have come before me, "football is life." And as part of that, our lives are full of these stories fueled by football. For me, if you couldn't figure it out already, I grew up in Australia and in amongst rugby and cricket and surfing and other crazy stuff. We played football. We call it soccer there, but it was football. I played on a great team with great people who went on to do some pretty extraordinary things, but what's most important for me for that time and the friendships that I forged, friendships that have lasted me a lifetime. As I grew, I went to work in an Italian restaurant to help pay my way through high school and college. And in addition to a bunch of very passionate Italians, we had 2 Turks, a Swed, a Dane, an Englishman from Blackpool and an Armenian maitre 'd who went by the name of Gino El Mano, not his real name, but that's a different story. And Gino is a very particular character with lots of very interesting characteristics, but the most important to us was there's a 40-something midfielder which seemed ancient to me at the time. He was an incredible playmaker in our Tuesday night pub league. I joined Electronic Arts in 2000 and I almost immediately started spending time in the U.K. and broader Europe, and ultimately ended up living in the U.K. for a stint. In a small studio apartment above a curry shop, which if you're a kid growing up with not much disposable income has all kinds of benefits, but for the first time in my life, I no longer had to seek football out. I was surrounded by it. I got to go see my first ever Premier League match, Fulham playing at Loftus Road, Craven Cottage was getting a refit, and Fulham were great, but Chelsea was my team. And I've been criticized a great deal over the years for being a Chelsea fan for all kinds of different reasons. But for me, watching Lampard and Drogba play was electrifying and I couldn't get away from the attraction I had to Chelsea Football Club. But I get to travel around Europe, I remember being in Munich in the winter and going to see Bayern play. Now I was not prepared for the cold I get there, I have a jacket on. I don't know what the temperature was, but it was cold. So I go immediately to the merchandise stand, and I buy beanies and scarves and socks and whatever paraphernalia, I could get in my body to keep me warm. I went to the bar and grab the drink and worked my way to my seat. I put my drink down and began cheering with my friends and fans around me for what seem like minutes, I bent down to pick up my drink, and it was frozen. As an Aussie kid who grew up on the beach, I've never seen this kind of environmental dark magic. So as I stood there clenching this ice cube shaped as a cup, looking enviously at those around me drinking warm red wine, I thought to myself, this is football. But it did prepare me for the next chapter of my football story, which was when I got invited to go to Vancouver, Canada, and it also gets a little cold from time to time and become part of the EA SPORTS Football video game team. We were the UN of video game development. We have 19 nationalities speaking what felt like 20 different languages. And for those of you that were part of the journey back then, the game we had then isn't the game we have now. And we would come to work every day united by this one thing. This passion, this love that we had for football. And we would challenge ourselves and ask ourselves the question, what happens if we go all in? What if we give this everything we've got? At a time where it wasn't our biggest game as a company, at a time where it wasn't the biggest sports game in the world, but it was the biggest game in the world. And we felt like it deserved everything we had, and we charged ourselves, could we change the way football video games are played? Well, it's 2010 since I was able to work directly with that team. I went on to do some different things in the company and ended up here before you today. But as I look back what that team in partnership with all of you, all of our friends, all our partners, all of our players. What that team has done is truly extraordinary. We have 150 million fans which if you measure us as a country would make us the ninth biggest country in the world. Last year alone, we had 9 billion hours of play more than 3x the viewership of the world's biggest linear entertainment properties. It's hard to argue that together, we came and we changed the way football video games were played. But if we let ourselves think just a little more broadly and a little more ambitiously and I think about the evolution of creativity and athletic performance inside of our game. I think about the fact that many of the biggest teams in the world and the biggest leagues in the world use our game in their youth programs to develop this great young talent that's coming up. And if I watch what happens on the pitch on Sundays, it's hard to argue that maybe, just maybe just a little way, we have changed the way football is played. But this is not about my story. This is about all of our stories. It is about our collective story, how we've come together, how football has fueled the great things in our lives. Collectively, we believe in the power of football. It's the biggest game in the world, but it's more than just a game. Today, we're going all in again, taking what we believe is one of the biggest steps possible. We believe that together, we can build the world's largest football community, where we can connect 1 billion fans through play. And just so you know, we can't do it without all of you. So again, thank you for being here. Welcome to EA SPORTS FC. Welcome to the club. And without further ado, I'd like to introduce you to President of EA SPORTS and dear friend of mine, Cam Weber.

Thanks, Andrew. And let me echo my thanks to everyone for being here with us in Amsterdam, and to all of you in the community that are joining us on the live stream. It means the world that you're here with us today because this is for all of you, for everyone who loves football. And this is bigger than games. We are here because something about sport in its purest form, the connection, competition, teamwork, passion, athletes doing extraordinary things. Something about all of that moves us each in deep and personal ways. That's what's always drawn me to sports. Like so many of you, I'm sure, I played football as a young kid. And as a little striker working together with my teammates on the pitch, the buildup of touches combining together to put the ball in the back of the net, I experience why football really is the beautiful game. And as a Canadian, I also grew up going to Vancouver Whitecap's matches with my dad, that I remember when I was a little guy. And fast forward far into the future to today, and now I spend my Saturday mornings watching Premier League matches with my son, who also played football as his first sport as well. And we spent a lot of time playing our games as well. Once football is part of you, it never really leaves. Football is also where I began with EA SPORTS. I was part of that UN of football that Andrew just talked about up in Vancouver. It was a little part of that. That was the point where I saw and felt the true power of football on a global scale. How our studio teams rally to bring these experiences to life, the relentless focus on gameplay innovation, keeping pace with the real world of football, and reaching to connect players in all corners of the world. Through it all, I've seen two things to be true. One, football has a real soul to it. And as fans, athletes, artists and creators, I'm sure you all feel that, too. That limitless excitement for what could happen next. Two, football is also really about skill. There's a technicality to it, but also there's power, and that creates unpredictable moments. Football is never static. It's always evolving, always moving. And at EA SPORTS, we carry these two principles as well. We call them authenticity and innovation, they're central threads foundational pieces of what EA Sports is all about. With authenticity, we're going to create FC experiences that champion a new culture of play, through everything that makes up the soul of football, from athletes to teams to competitions to fan communities. And with innovation, we're about to take the single biggest leap in technology and immersion that interactive football has ever seen. We've said from the start that we're building the world's biggest football club with EA SPORTS FC and we meant it. That's a commitment to all of you. Built on soul and skill of football authenticity and innovation growing it all together. We've got millions of fans engaging with our platform every day. But beyond that, we also recognize our responsibility to elevate and drive participation in the sport as well. And that extends beyond the digital world. So with EA SPORTS FC FUTURES, we have a $10 million plan to meaningfully invest in community level football on a global scale. We're proud to be partnering with football organizations and icons from across the globe to inspire young football players, providing access to new and refurbished pitches, drills and equipment, and we'll bring some of these pitches to our FC game experiences as well. And in partnership with UEFA, we've also developed a series of free training videos using our in-game skills mode for young players and community coaches to use for everyday training. Through EA SPORTS FC we're able to do so much more for fans. We're partnering with brands that share our commitment to growing the love of football. We've got so much exciting collaborations coming up and look forward to sharing more of that with you in the future. So it all begins here in the cradle of modern football in Amsterdam. Here's a film that represents the future of football that we're building together with our fans and our players and all of you. Welcome to the club. [Presentation]

Thanks so much, to Cam for sharing that with us, a great film showcasing EA SPORTS ability to bring fans closer. Closer to football, closer to each other and closer to the world's game. It's fitting that we're here in Amsterdam, the home of total football. The city has given so much to the game where there is a proven ground for Cruyff's triangular tactics or the birthplace of legends like Reichardt, Bergkamp, Gullit. Amsterdam is the perfect setting for us to launch the next chapter, of EA SPORTS Football platform, the next chapter of the world's game. Authenticity and innovation, as Cam said, these are central pillars for us and our network of partners across the world of football, amazing partners with us here tonight, from UEFA, CONMEBOL, NWSL and Serie A, these partners enable us to deliver on these core tenets. Not only through the licenses and likenesses in our games, but also through the innovative ways we work together to engage with fans and bring them closer to football. EA SPORTS FC is the world's biggest football club, and we know how important it is for fans to play authentically with their favorite leagues, teams and talent. So over many years, we've built an ecosystem of more than 300 partners, representing more than 19,000 athletes in more than 700 teams across 30 leagues and in over 100 stadia. Incredible IP from the passion of the Bundesliga, the power and tenacity of the NWSL, and the Gloria Eterna of the CONMEBOL or Copa Libertadores. Here with us tonight are the trophies of the world's greatest football competitions, representing the hopes and dreams of fans all over the world. But you might have noticed there are a few items missing, which suggests some big and exciting news for our fans. So much news, in fact, that I'm going to need some help in sharing it. Please welcome to the stage an incredible athlete, UEFA Women's Champions League winner, and EA SPORTS ambassador, Alex Scott.

Thank you, Dave. That is really heavy, wow. Love to cheer from down here. Thank you very much. DJ I thought I'd bring that with me, is that all right?

Thank you. That's good. We needed it.

We needed it . It's such an amazing experience playing in the competition, winning it. And DJ now I actually managed to score a goal back in 2007. Just thought I'd put that one in there. But the Women's UEFA Champions League made its debut to EA SPORTS this season, and we know the response from players has been incredible. We've got Laura Georges, we've got Kelly Smith here in the room as well. So it's amazing. Give them a cheer everyone [indiscernible] tonight. And we also know that the women's Champions League is made up of teams from all over the phenomenal women's leagues across Europe. Two of them, which already exist in the EA SPORTS Experiences through England WSL, we've got France's Division 1, the Féminine but tonight everybody, I am thrilled to confirm that EA SPORTS is adding two new women's leagues, to FC 24. Come on now, everybody. Yes, good [indiscernible], we've got Spain's Liga F with massive like Barcelona, Real Madrid, we've got Germany's, Frauen-Bundesliga, featuring giants like Bayern Munich and Wolfsburg all entering the game for the first time. I love that [ whoop ] over at the back. What else you have to share DJ?

Well, last week, we unveiled our incredible new partnership with LaLiga. It includes naming rights for both leagues, long-term licenses for our games and a joint commitment to supporting grassroots football in Spain via our FC FUTURES program. LaLiga EA SPORTS is the pinnacle of Spanish football and one of the most watched leagues in the world. We're very grateful for the deep and extensive partnership we share with the LaLiga team and all their clubs. And to celebrate this on behalf of our players, we wanted to ask someone who spent a little bit of time with the trophy to join us up here. Please welcome to the stage, a man with a velvet first touch, FC icon Ballon d'Or winner, Luis Figo. It's a very nice trophy. It is very nice. Thank you, Luis. Thank you so much.

Thank you for joining us.

Alex, what's next?

There's more, there's more. A big round of applause. Okay. Well, one of the most loved competition in Global Football is the Premier League played by millions of fans across all of our experiences. So tonight, EA SPORTS can proudly confirm they have signed an exclusive multiyear agreement with the lead to authentically represent every single athlete club and stadium across the FC portfolio for years to come. Now I'm just going to put it out there. I'm not necessarily a fan of this club. We all know where my heart is, but Andrew is, but I am a huge fan of this player. Please welcome to the stage, everyone 4 time winner of the Premier League and he is a Chelsea legend. It is Didier Drogba.

Didier [Foreign Language].

Come on everyone. Stand down there Didier.

All right. This final competition sits at the pinnacle of men's European football. It's the ultimate expression of glory and winners writing their names into the fabric of football eternity. Alongside the Liberatores, it stands separate in the pantheon of prizes available in Club Football, and I'm thrilled to announce tonight that EA SPORTS has entered into a new exclusive agreement with UEFA to share it with FC players for many years to come. For this one, we'll let the choir do the talking.

I think we need another one. Everyone, Ronaldinho. Can he get any cooler than that? Okay, EA SPORTS invest these partnerships for the benefit of football fans everywhere. And in the name of unrivaled authenticity, this an incredible lineup of trophies right behind us and the exceptional lineup of partners on the screen behind me right now, represent the story of football fans everywhere. This lineup is only possible through EA SPORTS and they will all be a part of FC Experiences.

We know how important it is for authenticity for our fans to play with their favorite athletes, teams and leagues, however they choose to play. And that's why we're so energized by the network we've created across the entire world of football. Thanks to Alex, Luis, Didier and the one and only Ronaldinho for helping share this news with us this evening. And now here to share how we'll represent all of this for all of you, is Nick Wlodyka the GM of EA SPORTS FC to showcase the innovative and all new FC 24.

Absolutely incredible. Thank you, DJ. On behalf of our development teams and partner studios all around the world, I'm honored to share with you the interactive future of the sport we all love. When considering what matters most to you, our fans in '24 we established 2 clear directives driven by the pillars of authenticity and innovation. Number one, to create experiences were previously never before possible for us to achieve, and number two, to build from our 30-year foundation of innovative gameplay to bring you even closer to the world's game. So let's get into it. Let me show you our most authentic football experience yet, built with the best fans, leagues and partners. Let me show you FC 24 and the FC brand ecosystem, its foundation. FC 24 is built on a trinity of all new technology that revolutionizes gameplay. Let's start with Hypermotion V. This is the biggest step change in any EA SPORTS game, possibly ever. HyperMotion V utilizes volumetric capture from more than 180 matches to build the most precise animations ever. We can now see a play happen in real time in the Champions League and within days, have those animations in our engine ready to drop into the game for you. You'll remember this iconic goal from Erling Haaland in the Champions League, now an animation in game, thanks to HyperMotion V. This is the first time we've been able to capture direct from live professional matches. And that gets you closer to the real thing than ever before. Next, the Frostbite engine is always evolving, and this season is no exception. It's been totally overhauled and you just saw what it can do in the trailer a few minutes ago. So what's powering Frostbite? Our all new EA SPORTS SAPIEN Technology, which delivers body forms 10x more precise than previous iterations and measures movement to the smallest detail. So player likeness is unmatched. You can see here in the animation of the kits. GPU cloth finally models the fits of modern football. Now you can see player athleticism as kits respond to players as they move, and Frostbite powers an all-new match day experience, as you see here. Dynamic match intros and matchday menus will showcase never before seen angles of the action including new footage of pundits and commentators. Now that's a lot. We have one more to highlight. Our third piece in the Trinity of technology is PlayStyles. Optimized by Opta. As many of you know, Opta has been the industry leader in understanding player data for 25 years. With this collaboration, we've equipped footballers with their signature abilities, and we're calling those PlayStyles. So Sam Kerr without PlayStyles might miss the target. Sam with the finesse finishing play style clearly finds the back of the net. Take it from me. This is the best gameplay we've ever had, and we also have massive news in our modes. It starts with Ultimate Team, but I'll let someone much more qualified tell you a little bit about it.

Hi Nick, EA SPORTS and everyone in Amsterdam all the people watching. I wanted to say congratulations on the reveal of FC, I'm gutted to not be there, but very happy to be an official ambassador for EA SPORTS, and I'm so proud of the development across the women's game, especially to hear and announce the massive news that women's football will be in Ultimate Team this year. Congrats again, Nick and EA SPORTS FC team. I hope you all have some time to tune in to cheer on the [indiscernible] with me soon. All the best.

Thank you, Leah. Ultimate Team is the most played mode where you build your dream squad. The big news that Leah just broke, women's football is coming to Ultimate Team. This is the biggest player pool we've ever introduced, including heroes, icons and 6 different competitions, unlocking the most squad-building opportunities you've ever had. An Ultimate Team is also introducing evolutions, allowing you to upgrade players throughout the season based on your play so you can build true unique club legends in your squad. Our focus for FC 24 is only matched by our ambition for the massive FC ecosystem that includes online, mobile, tactical and FC Pro. Later in September, when it updates, FC Online will be a part of the Asian games. That's exciting news as it's the very first time video games will be recognized as an official sport. FC Mobile delivers a whole new feature set to its growing base of over 100 million fans with an update to come later this fall. We're also expanding our mobile offering with FC Tactical, a turn-based strategy game, offering entirely new ways to experience the world's game. This next one is long overdue, FC Pro is our all-new EA SPORTS platform -- the Esports platform excuse me, built with our league partners and our Pro players. We've never been able to do this. FC Pro simplifies the path to the finals that puts all players in a single competitive structure culminating in the FC Pro championship. And finally, we're expanding the FC's brand and ecosystem in entirely new ways. We're very, very early on with many different projects, and there's a lot to get excited about. Okay, let me just say thank you. Thank you to all of you. FC is a platform intended to grow the love of football, and it's created by, for, and with our entire worldwide community. FC 24 will launch globally on September 29, and get early access on September 22 if you preorder the Ultimate edition. And now without further ado, here is the world premiere of EA SPORTS FC 24. [Presentation]

Absolutely love it. And we're not done just yet. We have a 1 last thing. Everyone, welcome Erling Haaland to the FC family.

Thank you.

Congratulations Erling. It's been a remarkable season. Premier League goal scoring record, the treble. We're so, so proud to have you grace the cover of this very special FC. What do you think? How did we do?

No, I like it. I have to say. It's not bad. No, really,like first of all, the picture, it's really nice from the game, when I scored 5 goals. So that's a good start. And also, I mean see, everyone knows that as a footballer and everything, it's a dream, for every single guy that plays football. And then to be able to be on the cover is -- it's really nice. So I'm really happy and yes, it's a really proud moment.

Thank you, Erling, for joining us on this memorable day. Thank you, everyone. That's the end of the show. Goodbye from Amsterdam.