Ultimate Team Modes Bring EA $3k Per Minute
Ultimate Team packs continue to bring Electronic Arts huge money. According to the company's financial report, last year alone the revenue from lootboxes in sports series like FIFA amounted to more than one and a half billion dollars.
Critics of microtransactions may rant their opposition to lootboxes, but there's no denying the profit they bring to publishers, and if the financial reports and analysis of recent years weren't proof enough for anyone, a new document sent by Electronic Arts to the U.S. Securities and Exchange Commission must be considered as such. In 2020 alone, Electronic Arts reported net revenue of $1.62 billion from all Ultimate Team variants in EA Sports games. That adds up to nearly $3,000 every minute from lootboxes and represents 29% of the publisher's total net revenue in fiscal year 2021
This is another year in a row that Electronic Arts has seen a sizable increase in Ultimate Team revenue. Since 2015, net revenue has nearly tripled, from $587 million to nearly $1.5 billion in fiscal year 2020 and finally to $1.62 billion a year later. Analyst Daniel Ahmad pointed out that the lion's share of that total is due to the Ultimate Team mode in the FIFA series. It's no surprise, as EA's football series is consistently on the best-seller lists.
For the same reason, it's FIFA is the most frequently cited brand in conversations about the possibly harmful impact of lootboxes in sports games (and beyond). These discussions have intensified in recent years, and largely due to Electronic Arts. As a result, more countries have either recognized lootboxes as gambling or are on their way to do so. The company continues to claim that its products do not violate current gambling laws, and while it doesn't deny that some elements of its games or services will be affected by the changes in the law, the company doesn't believe that the "financial or operational consequences" of these actions have negatively impacted its results:
"Certain of our business models and features within our games and services are subject to new laws or regulations or evolving interpretations and application of existing laws and regulations, including those related to gambling.
The growth and development of electronic commerce, virtual items and virtual currency has prompted calls for new laws and regulations and resulted in the application of existing laws or regulations that have limited or restricted the sale of our products and services in certain territories. For example, governmental organizations have applied existing laws and regulations to certain mechanics commonly included within our games, including the Ultimate Team mode associated with our sports franchises.
We do not believe that the operational or financial consequences from these proceedings will have a material adverse effect on our Consolidated Financial Statements."
That said, there's no doubt that EA would be hit hard by the recognition of lootboxes as gambling in more countries. This would be particularly painful in the UK, which remains one of the most lucrative markets for the FIFA series. It is in this country that there has been a long-standing discussion about revisiting the issue of paid loot boxes, fueled by the publications of British academics. Perhaps this has motivated Electronic Arts to introduce an option to control spending and the ability to directly purchase cosmetic items (so far acquired by opening loot boxes) in FIFA 21.
