Electronic Arts Q1 Conference Call Details

Out of the “Why is EA still dissing the Dreamcast” department, a forumer from the pages listened on on the call.  Here is PsychoDCFan’s report from the DC Tech Pages:

EA’s Intro:
– Interactive entertainment software market is always slow in FYQ1 (April, May, June), but was especially slow for EA due to PS2 anticipation
– There was big growth in the sub-$30 software group. Full price s/w sales growth was flat
– The biggest growth was in the budget category
– The bulk of EA’s Online revenue ($8.3 million) came from subscription revenues (mostly Ultima Online)
– EA is attempting to transition to a mix of subscription and ad revenue
– PS2 and Online products accounted for 12.5% of EA’s totally FYQ1 revenue
– $30m spent on EA.com Online in FYQ1
– Total console market expected to be down 5-10% for this calendar year
– 2.5m PS2 units shipped in for Japan through June
– Sony anticipates 10m PS2 units in all three markets by end of FY – demand should outstrip supply
– EA believes Dreamcast “not a factor especially after PS2 ships”
– EA agrees that console market has been softening, but the questions is “how much, how fast?”
– November 1 is when EA.com will start billing customers

Q&A Session
– Microsoft and Nintendo intend to ship their new platforms next fall – EA expects to support both platforms “on some level”
– PS2 unit numbers: 4m in Japan, 3m in both North America and Europe (10m total) for this FY (ending March). EA is confident that Sony will meet or exceed these numbers
– EA believes PS2 will be selling “real fast” going into FY02
– EA.com IPO scheduled for “first half of next calendar year”
– Gameboy Advanced handheld is a “likely platform” for EA
– EA.com Online (this is the “EA as AOL’s Game Provider” deal) consists of:

* Genesis sports titles online
* Games to be played through browser such as “a boxing game”
* “Gamettes” – shockwave games, ie., basketball, football
* Matching services – online players use the service to hook up with other online players
– Number of PS2 titles at launch: press talk has been of 30 (50 by CY end). EA thinks there will be less than that: 15-20 at launch (25-30 at year end)
– 1.5:1 s/w sell through to h/w sell through for 1st quarter in Japan due to poor content
– 3-4:1 ratio in North America with better content available
– Launch of new PS One product (smaller version of original PSX) will benefit the market – Sony wants to bring in 4m PS One units to North America market by end of year
– S/w sales on PS2 “far exceeding what Sony experienced on PS1”
– EA cites Japanese PS2 s/w sell through numbers of 700k for Ridge Racer and 250k for FIFA as evidence of the strength of the PS2 market for great games
– EA doesn’t think the PS2’s DVD feature has diminished s/w sales, blames poor content at Japanese launch for lower sales
– World wide, sell through is up and sell in is down as retailers attempt to clear channel in anticipation of PS2 launch
– Retailers more willing to buy good s/w with the extra space on their shelves
– Sales of great PS1 games can benefit from the backward compatibility of the PS2 – the newest Final Fantasy on the PS1 sold through 2m almost immediately partially due to this, EA says
– PS2 margins: full-price s/w at $50 retail, PS1 s/w has been at $40 for a couple years now as Sony lowered s/w prices later in that console’s life
– Currently there are higher margins on PS2 s/w than on PS1 as the costs are the same (COGs, royalties, etc.) – over time, PS2 products will reduce in price (in a couple years they will be down at $40 like the PS1 s/w is now)
– EA is asked to comment on the dot-com competitive landscape. They break it down like this:
1) mass market, content-for-free ad-driven model – eg., Uproar, Boxerjam, Iwin
2) Traditional games site, Won.net, MS Zone
3) Subscription model – Ultima Online, EverQuest, Asheron’s Call
– They believe the winning online strategy is a blend of subscription and ad-driven; Microsoft, Sony, Sega, and Havas believe in the last model too and are developing products and services to support this, but “aren’t as far ahead as EA”

So, in a nutshell, EA won’t support the Dreamcast, will support every other system on the market, yet put their Genesis sports titles online.  Sega should be asking for some royalty money for this.  Will this situation change?  Most likely not.