Electronic Arts (EA) is a very famous gaming company. The earning call of EA for the fourth quarter of its fiscal year held on May 11 2016. In that function they revealed their own thoughts on whether or not Microsoft and Sony are releasing new console designs. They also shared that how these upgrading plans might affect their own business. In past this sort of plans and transitions between console generations have always been a bit great for game publishers. They must control the higher R&D costs associated with new platforms and modest primary sales in order to an obviously limited install base.
Blake Jorgensen CFO of EA shared some information on the potential refresh from EA’s perspective, while EA can’t share any information on any release plans of Sony and Microsoft.
In the mid-cycle upgrades, once again I can’t predict. But I can tell you what was heard I think publicly from the console developers is they are realizing that the compatibility issue across consoles is an important consumer issue. And as Microsoft has shared, they have tried to do with some backward compatibility on to older titles and new titles. I think that’s going to be an important part of what a mid-cycle might look like if there is one, which removes a lot of the risk associated with what we have seen in past event with console cycles. We don’t spend a lot of time worrying about it, because we feel like our ability to develop for whatever new technology comes, the risk of that’s been minimized because we’ve moved towards one single engine.
In addition, our business model is so much more diverse now than it has been historically, that the notion of a console cycle becomes somewhat irrelevant in our ability to generate strong earnings and cash flow. So we will all be interested to see where Microsoft and Sony come out if they do something at E3 or sometime in the year to come, but we’re excited about the continued growth in the business and not afraid of a cycle change if that was to occur.