Activision vs. EA: Quarterly console performance of gaming's publishing giants
Alongside the release of their financial data for the quarter ending June 30, Activision and EA have also released detailed breakdowns of the revenue generated from their titles on each of the major consoles. Taking a look at the numbers tells an interesting story about each publisher. The bulk of EA's non-GAAP revenues come from the Wii, which generated $184 million for the company. The Xbox 360 takes the second spot at $136 million, followed by the PS3 at $99 million.
Meanwhile, Activision's portfolio was much more dependent on the Xbox 360 and PS3, both garnering non-GAAP revenues of $140 million and $104 million, respectively. The Wii, in stark contrast to EA, only generated $74 million for Activision. It's important to note that companies calculate non-GAAP numbers in different ways, but they are useful in judging the financial proportions of each console.
Joystiq reached out to EEDAR's Jesse Divnich for his thoughts on the results for each company. Find them after the break.
Divnich notes that EA Sports Active made Electronic Arts over $80 million last quarter, which accounts for the Wii's prominence in the financial results. He adds that as the industry heads toward the holiday season "the Xbox 360 should be the dominant platform for the remainder of the year" for EA, with special thanks to titles like Madden.
Meanwhile, Divnich says that titles like Guitar Hero, Band Hero and DJ Hero should bolster the Wii's share of Activision's business. He adds further that such titles might even outsell the Xbox 360 and PS3 versions.
When asked about the overall strategy employed by both companies, Divnich noted that EA hit "a rough patch in 2007 and 2008" as brands like Need for Speed and Medal of Honor "peaked in popularity and sales," forcing the company to create some new IP (e.g., Dragon Age, Dante's Inferno, Dead Space, Brütal Legend, etc.). Divnich states that wholly owned intellectual properties have the biggest long-term rewards for a company, but also carry the biggest risk. "Personally," says Divnich, "I believe Electronic Arts is primed for continued growth as their current pipeline represents a healthy mix of new intellectual properties as well as established brands." While some new IP launches are destined to fail, he says, "it only takes the success of one to offset the failure of two."
Activision, says Divnich, is in "a different phase in its growth," elaborating that the company still has "many successful and well-established brands that have not reached their peak in popularity." Divnich believes that Call of Duty has "at least three years of life left in it," while Blizzard "has a sack full of established IPs that can keep us all entertained for the next ten years." He acknowledges that Guitar Hero may be peaking, but says it's still "generating a significant amount of revenue."
Divnich notes he'd like to see Activision produce "a greater mix of new intellectual properties," but says it's hard to argue with "an organization that has delivered a nearly flawless execution over the last two years." When asked if Activision should try to emulate EA's success with Wii exclusives, Divnich notes that many publishers "do not have the best track record for creating successful Wii exclusives." In other words, it's probably best for Activision to stick with the strategy that's been working.
