Electronic Arts Q3 2022 Earnings Call Transcript

Participants

Corporate Executives

• Chris Evenden, Vice President of Investor Relations
• Andrew Wilson, Chief Executive Officer
• Blake Jorgensen, Chief Financial Officer

Analysts

• Unidentified Participant
• Andrew Uerkwitz, Jefferies Financial Group Inc.
• Mike Hickey, Benchmark Co.
• Eric Handler, MKM Partners
• Matthew Thornton, Truist Securities
• Drew Crum, Stifel Nicolaus
• Jason Bazinet, Smith Barney Citigroup
• Mike Ng, The Goldman Sachs Group, Inc.
• Mario Lu, Barclays PLC
• Andrew Marok, Raymond James
• Doug Creutz, Cowen Inc

Presentation

[Operator]

Good afternoon. My name is Juanita [Phonetic] and I will be your conference operator today. At this time, I would like to welcome everyone to the Electronic Arts' Q3 2022 Earnings Conference Call. Mr. Chris Evenden, VP of Investor Relations. You may begin your conference.

[Chris Evenden, Vice President of Investor Relations at Electronic Arts]

Thank you. Juanita [Phonetic] Mika. Welcome to EA's third quarter of fiscal 2022 earnings call. With me on the call today are Andrew Wilson, our CEO, and Blake Jorgensen, our CFO. Please note that our SEC filings and our Earnings Release are available at ir.ea.com. In addition, we have posted detailed earnings slides to accompany our prepared remarks. And lastly, after the call, we will post our prepared remarks, an audio replay of this call, our financial model, and a transcript. With regards to our calendar, our Q4 fiscal 22 earnings call is scheduled for Tuesday, May 10.

And as a reminder, a week from that, we'll post the schedule of our entire fiscal year of upcoming earnings calls on our IR website. This presentation and our comments include forward-looking statements regarding future events and the future financial performance of the Company. Actual events and results may differ materially from our expectations. We refer you to our most recent Form 10-Q for a discussion of risks that could cause actual results to differ materially from those discussed today.

Electronic Arts makes these statements as of today, February 1, 2022, and disclaims any duty to update them. During this call, the financial metrics, with the exception of free cash flow, will be presented on a GAAP basis. All comparisons made in the course of this call are against the same period in the prior year, unless otherwise stated.

Now, I'll turn the call over to Andrew.

[Andrew Wilson, Chief Executive Officer at Electronic Arts]

Thanks, Chris. I hope all of you and your families and loved ones are staying healthy. Let me firstly thank you to our talented teams Electronic Arts. All 12,000 people putting so much energy every day to do an amazing things for our clients. As we begin, I'd also like to say a few words about John Madden. John's passing was a tremendous loss to the American Football Community for the sports world at large and for all of us at Electronic Arts. Through the years as a winning coach, as a [Indecipherable] broadcaster, and as a pioneering namesake about game Coach Madden [Indecipherable] football for 10s of millions of fans. He thought[Phonetic] us many things of nearly 35 years of partnership. Some of his most important lessons, including authenticity are things which are close to EA SPORTS ever since. We feel incredibly fortunate to have been part of the coach's legacy and just as fortunate to be part of how it will live on through the future of our Madden NFL games. We'll have more to share about how we are honoring coachman in the weeks ahead and from all of us at Electronic Arts, our stores and sympathies continue to be with his family, friends and many, many fans.

It has been a year of outstanding growth so far in FY22. Q3 was a record quarter with our live services and known portfolio delivering strong reoccurring revenue and year-over-year growth. Our franchises like Apex Legends, our EA SPORTS titles, The Sims, and more have universal appeal. And as we expand to more ways to play across more platforms and business models, we are growing our total players, engagement, net bookings, and underlying profitability. We didn't have a charge in Q3 as the launch of Battlefield 2042 did not meet expectations. Battlefield 2042 was always an ambitious turning and our teams push to innovate across many dimensions, including Matthew scale and 128 planned matches, new modes, new dynamic gameplay, and more.

Developing this game with our teams working from home for nearly 2 years ultimately proved to be challenging. Through our process for testing and preparation, we believe the experiences are ready to be put in our players' hands. We launched with strong stability. However, as more experienced the full game, it became clear that were unanticipated performance issues that we would need to address. Some of the design choices we made with the game also did not resonate with everyone in our community. We are fully committed to realizing the full protection of this game and fully committed to our Battlefield fans. We've already implemented a series of major updates to the game and there is more to be done. Players can expect meaningful updates to continue in the weeks ahead and we are shifting the first season of live service content to early summer as we work closely with our community to evolve and improve the core experience in Battlefield 2042.

Despite Battlefield's miss against our expectations with the strength of our business, we are continuing to deliver record growth and performance in FY22. With Battlefield's performance to date and our decision to move the first season of live services into Q1 FY23, so we can focus on the core experience, we have adjusted our full year net bookings guidance to $7.525 billion, which remains $225 million above our original net bookings guidance for FY22. On the strength of our live services, operational discipline, and digital transformation, we are reaffirming our full year expectations for underlying profitability. We expect strong growth to continue in FY23.

Looking across our portfolio, we saw continuing year-over-year growth in total players engagement, net bookings, cash flow, and underlying profitability in Q3. I'll touch on each of those pieces here. Beginning with total players, our games and experiences connect a global network that continues to scale. Over the last year, our network has grown to more than 540 million unique active accounts across more than 18 games and 25 live services spanning all major platforms from console to PC to mobile and cloud. From an engagement standpoint, more players are spending more time in our models. Looking across our portfolio and all platforms, we've had more than 180 million monthly active accounts on average in our games during FY22. Apex Legends' monthly active players were up more than 30% year-over-year in Q3 and across our combined EA SPORTS portfolio monthly active players are also growing year-over-year. Engagement is deepening as well as players spending nearly 20% more time in games across our portfolio in FY22 compared to the previous year.

Growth in our network engagement continues to drive growth in our business. With our top franchises delivering strong recurring revenues, our net bookings for Q3 grew 7.4% year-over-year for the quarter and the full year, we project 22% growth in net bookings over the last year. Performance across the business and operational discipline also continued to deliver strong cash flow and underlying profitability growth in Q3. The continued growth is anchored by proven franchises where we have a strong track record for execution. Apex Legends is now one of the biggest and most successful ongoing lives services in the industry and is built on our owned IP. With more than 28 million new players joining the last year and new seasons and in game events that can deliver new experiences to a deeply engaged community, FY22 is the biggest year yet for Apex. Average prior investment in the games has grown significantly year-over-year and we expect to -- and we continue to expect net bookings for Apex to approach 1 billion in FY22.

We are expanding to reach more players and viewers with new original content on the way. Our growing Apex Legends eSports ecosystem and Apex Legends Mobile will soon be moving into the soft launch as we continue our worldwide rollout. We've had strong engagement in community venturing closed beta testing and we're excited for more players to experience Apex Legends Mobile soon.

Mobile is a core growth engine for us and it is accelerating. When new launches and acquired expertise and technologies leverage across our portfolio, we expect Mobile to be a major catalyst in FY23 with growth well into the double digits. Led by Apex Mobile, a newly updated Peter mobile game, Gulf clash, and more unannounced projects we are expanding our portfolio of more than 15 top global live services to reach new audiences and grow our recurring revenue.

EA SPORTS is a powerhouse in the sports and entertainment world. Withdrew hundreds of millions of dollars in net bookings growth year-to-date where our EA SPORTS business up nearly 10% year-over-year. We continue to see incredible growth for the future of global soccer and a global soccer franchise was a number 1 title in the western world in calendar 2021. [Indecipherable] 22 was the number one sports title in the US during the holiday period and it was a number 3 top-selling game in the US for all of last year. [Indecipherable] F1 2021 also continues to perform well above expectations with units out nearly doubling year-over-year during the holiday period. In mobile SPORTS portfolio, we just launched minus version of our EA SPORTS FIFA Mobile game around the world. This was the biggest update to the game ever and building performance has been exceptional.

Engagement is up more than 50% of the previous season and retention in the first week is nearly double. With the added expertise of [Indecipherable] and a deep pipeline of new SPORTS experiences in development, EA SPORTS continues to be an exceptional growth business built on predictable and recurring revenue with outstanding opportunities ahead. Our pipeline further amplifies our strength. In addition to our coal franchise, we are building new experiences in some of the biggest in during IP in entertainment. Last week, we announced a new agreement with Disney and Lucas from games developed new experiences in the Star Wars universe continue our collaboration of more than a decade.

Respawn is leading development of the next game in our action venture Star Wars Jedi series as well as 2 additional Star Wars titles. This adds to our deep pipeline of announced and unannounced projects with a wholly-owned IP including Need for Speed a franchises The Sims, Skype, Dead Space and more. Looking ahead, we're are continuing to build on the structural advantages of our portfolio and accelerating growth by executing against that core strategy. We are focused on creating amazing games and content, providing creation tools for the community to engage more deeply with our experiences, aggregating and distributing our content experiences to more players on more platforms in more geographies and more business models.

At harnessing the power of the social ecosystems in and around our games. The demand for amazing games and new ways to play, watch, share and create has never been stronger. And one of the industry's largest most profitable businesses with strong recurring revenue, we're well positioned to take advantage of this continued secular growth. We look forward to delivering against these opportunities through FY23 and beyond.

Now, I'll hand the call over to Blake.

[Blake Jorgensen, Chief Financial Officer at Electronic Arts]

Thanks, Andrew. Q3 was a quarter that demonstrated the strength of our live services portfolio. Despite a tough Battlefield launch, we came within a couple of the percent of our net bookings guidance and beat our expectations for underlying profitability. The quarter was the largest in our Company's history for the bookings, underlying profitability, and cash generation. Sales of Battlefield 2042 were disappointing, but they are offset by a strong showing from FIFA and continued strength from Apex and our other franchises. We delivered net revenue of $1.79 billion and net bookings of $2.58 billion. FIFA 22 strong start continued into this quarter, with unit sales now up double digits over last year watch to date and players continue to engage in FIFA Ultimate Team and invest in their teams. This has made it the strongest FIFA launch ever measured from launch to the end of Q3.

Apex Legends net bookings continue to grow at an extraordinary rate and will deliver close to $1 billion for the year. Digital represents 60% of our full game units sold through on a trailing 12-month basis, up 2 percentage points from last year. The strong digital mix for full game sales aided by growth in live services pushed underlying Q3 gross margins 2.3 percentage point above last year. Operating expenses, which include recent acquisition costs came in below our expectations, driven by variable compensation and savings and phasing of marketing spend. It's worth noting that we were able to hire more people in any other quarter in our history and we're continuing to invest in our games. We now expect fiscal 2022 GAAP net revenue to be $6.925 billion, cost of revenue to be $1.844 billion and earnings per share of $2.43, up from our original expectation of $1.34.

We are taking our net bookings guidance for the year to $7.52 billion although a $100 million reduction on our position at the end of Q2, it is still $225 million above our original guidance for the year. The reduction is driven by Battlefield 2042 in both Q3 and Q4. But offset by the strength in the rest of our business, particularly in FIFA and Apex Legends. We're committed to turning Battlefield around and building a sustainable live service even if some of the actions we're taking by moving the first season into FY23 impact net bookings for the short term.

Reflecting the strength of our portfolio, our operating cash flow guidance is now $1.9 billion. This would be close to the largest full-year operating cash flow in the company's history, despite nearly $200 million of one-time tax payments related to acquisition for sure. In capital expenditure is still around $200 million that went deliver free cash flow of $1.7 billion. Note that this is $200 million above our original expectations for FY22 free cash flow. See our earnings slides and press release for further cash flow information.

For the fourth quarter, we expect GAAP net revenue from $1.759 billion, cost of revenue to be $404 million, and operating expenses of $1.086 billion. This results in earnings per share of $0.46 for the fourth quarter. We expect Q4 fiscal 2022 net bookings to be $1.761 billion. This would be our largest Q4 ever even if we only count organic growth or formally guide FY23 and they when we report Q4 but we've heard that some of you are concerned that the Battlefield performance by impact next year's growth.

Let me emphasize here again that we are a portfolio company as originally forecast Battlefield franchise we have accounted for significantly less than 10% of this year's net bookings and well below 5% of next year. We are revising those numbers, but you can see it has a little impact on FY23 growth. The main driver growth next year remains FIFA on console, Apex Legends, Apex Mobile, and FIFA Mobile. Golf Clash will also contribute to year-on-year growth since we acquired play day halfway through the year. With regard to new launches in FY23, we've disclosed that Need for Speed is on the slide and will announce more titles closer to the time. In total, we still expect mid to high single-digit growth next year.

To summarize, we just delivered the largest quarter in the company's history. FIFA goes from strength to strength. Apex Legends to continue to show extraordinary growth. Battlefield disappointed, but our broad portfolio games and live services insulate us from the impact of any one-time. Our portfolio approach is -- approach enables us to deliver double-digit organic growth this year and continue to deliver strong cash flow and provide a strong foundation for growth as we look to the future.

Before I hand the call to Andrew, you may have noticed but yesterday, we announced a new CFO for the company and I think the new CFO, Chris, is going to be in a fabulous addition and will do a much better job probably than I've ever done. I think, Andrew, and the team of our executives as well as the entire company for the amazing partnership that I've had here for 9.5 years of the year, it has been the most enjoyable experience of buying entire quarter. I also thank the buying side and sell-side analysts and partners for all of their support over the years and wonderful interaction and last but not least Chris Evenden, [Indecipherable] for their amazing IR performance that interests all of you. So, now I'll hand the call back to Andrew.

[Andrew Wilson, Chief Executive Officer at Electronic Arts]

Thank you, Blake. These are exciting times in our industry. Indirectly, but the time will continue to grow by every measure and our audiences are expanding and diversifying. Major franchise of culture and entertainment and the world is recognizing how games in the power connect global communities. Our focus continues to be on our people, our players, on our amazing portfolio of games content and services, an extraordinary growth opportunities in the future. Thanks to our incredibly talented teams Electronic Arts, we are delivering entertainment to hundreds of million on people around the world and connecting them through some of the most powerful enduring franchise. With the breadth and depth of our business that continue to expand our network deepen engagement and drive the growth in our recurring net bookings and ongoing profitability, we are well positioned and strategically -- well positioned strategically to continue building on our success and delivering for our players.

As we look ahead and as Blake just referenced, we were excited to announce yesterday the Chris is joining Electronic Arts as our next CFO. Chris is coming to us after more than 25 years at Microsoft, where he served as Corporate Vice President and Chief Financial Officer of the cloud and AI group which you led with incredible success during Microsoft's transformation towards a cloud first company. We have a big vision for the future and in addition to Chris' financial leadership of our organization, I look forward to having him as a strategic partner with extensive experience driving scale and growth to help us achieve our goals.

As we've announced previously, Blake will be leading our team after nearly a decade of leadership and partnership at the EA. Blake has been an incredible leader, partner, and advisor, but most importantly, he has a dear friend and I feel deeply grateful for our time working together. Theis expertise and the team he has built have been instrumental in our growth and financial achievements and has positioned us well for continued success. Blake will remain with us until the summer to assist with the transition and special projects. Thank you, Blake, for everything you've done and continue to do for our company. And again, thank you for your friendship. Now we are here for your questions.

Questions and Answers

[Operator]

[Operator Instructions] Your first question comes from the line of Benjamin [Indecipherable] from Deutsche Bank. Your line is now open.

[Unidentified Participant, at Electronic Arts]

Hey guys, just a quick. Thank you to Blake for being a great partner and looking forward to meeting Chris. Two questions, first just around Battlefield. Can you guys sort of frame for us how you think about the vision for the future of that franchise and in particular, how the new leadership for the Battlefield team is thinking about expanding and adapting that franchise over time [Indecipherable] question.

[Andrew Wilson, Chief Executive Officer at Electronic Arts]

Yeah, great question. Again, we have a very bold vision for where this franchise goes. This franchise is always lead the category in creativity, innovation, scale, gameplay, community. And as we can be the launch, again, we had a very bold vision for this game. As it turns out, we've had some challenges not least of all trying to build this Kevin farmers game from home and so our focus now is really making sure that core experience lives up to our fans the communities expectations. Beyond that, we'll continue to invest and grow the franchise, we have great leadership with Vince and Byron and others with tremendous background from other great shooters in the industry trying to leading the future. I believe that we going to see this going to really well over the course of time. I think we will expand expand to other new and interesting ways to play. But certainly, this is just a moment where we take a pause and do what we can for the KOL games in the KOL community.

[Unidentified Participant, at Electronic Arts]

Got it. And then, just in light of the announcement that you guys are working on those 3 new Star Wars games. Can you talk a little bit more about your vision for that IP and is it fair to say that going forward you're planning to lean more towards investing your own IP. And if so, what are, this is like some of the potential pros and cons of that as a strategy? Thanks.

[Andrew Wilson, Chief Executive Officer at Electronic Arts]

Yes, the very strength of our business is our balanced portfolio. We have both deep and a broad portfolio and what we've demonstrated over the course of our, the best part of 40 years is to really develop for both our own IP over time The Sims, Battlefield, Apex Legends our by franchises we have skating development now Dead Space on the way. So an incredible portfolio of own IP has an extraordinary following across industry combined with other long-term enduring IP. We have the power of sports franchises and they are true evergreen franchises. And this is not just about licensing content. This is about working with over 300 partners across the very SPORTS industry to deliver a true connection with the sports, the leagues, the teams suppliers that our fans love and we've been doing that now for well over 30 years and I think will continue to do that for many, many years in the future and things like the Star Wars franchise again, a long-term relationship we've had with Disney for more than a decade. And this is not simply about building or revisiting things already exist in the universe. But really adding to that Star Wars universe and really delivering new opportunities for Star Wars fans to experience great style Wars content and so if you think about our strategy going forward and the strength of our company, it really comes down to our ability to develop and build and publish industry leading owned IP but also work with partners over decades to truly fan with loan and enduring fan basis like our sports franchises and like Disney.

[Operator]

Your next question comes from the line of Andrew Uerkwitz from Jefferies. Your line is now open.

[Andrew Uerkwitz, Analyst at Jefferies Financial Group]

Hey, thanks -- thanks for taking the call. Just reiterate the positive sentiment from Blake like it's been a great run, really enjoyed it. I guess I just had really one question, no follow up. One of your bigger competitors just taken out, you guys have quite a portfolio and taking a portfolio approach for years. How do you think the industry will look and 3 or 4 years? Do you guys see yourself as a consolidator or potential seller? How do you see this industry shaping out over the next 3 to 5 years? Thanks.

[Andrew Wilson, Chief Executive Officer at Electronic Arts]

Yes, great question. And you should imagine we would be registered some time as it turned out, and part of the reason why we have built the strength in our broad and deep portfolio on why we have going out in search of the best teams in the industry to bring them into our company and build great entertainment for our global player base in what is now well over 0.5 billion fans is because we do believe in the power entertainment, we do believe in the power interacted entertainment. I think what we're seeing now in the marketplace is launching of the value of what we do in particular. And so as I think about the future of the industry. I do believe that we will start to see entertainment coming to [Indecipherable] seeing some other companies talk about this, but when we think about how players and we think about the things that they engage in. They play our games more than any other form of entertainment, but they also consume linear media and scripted entertainment and sports broadcast and music and other things, so as we look at the future, we are building strength in our core and very limited interactive entertainment to our fans, which we think will continue to grow well north of 1 billion fans over time, but we're also aware that our fans are expecting us to find new and interesting ways for them to experience entertainment and so a lot as we think about the future, you should think about it with IP at the center and engagement around play, watch, creat social ecosystem that brings fans together around the content they love and when you look at our strategy of what we're doing, routing, creating great entertainment around building tools so that our community to engage more deeply around aggregation and distribution of content across platforms, across business models, across geographies and really leaning into the social interests into the board out of engagement games. I think you should imagine that's what the world looks a lot more like 4 or 5 each of now.

[Andrew Uerkwitz, Analyst at Jefferies Financial Group]

Got it. Thank you so much.

[Operator]

Your next question comes from the line of Mike Hickey from Benchmark. Your line is now open.

[Mike Hickey, Analyst at Benchmark]

Hey, Andrew, Blake, Chris, thanks for taking my questions guys and Blake, I'm going to miss you, but I'm sure you begin to a lot of skiing and so on that front but it's been great working, so my question is I guess on Battlefield obviously disappointed. Can you give us some size of the units sold in quarter? I think you guided for 12 or so to curious where you ended up versus expectations and then thinking about how you sort of re-engage that audience there has been some ideas around period of say curious about the possibility. And then I didn't hear mobile did you drop mobile for Battlefield is that is delayed? Thanks for that.

[Blake Jorgensen, Chief Financial Officer at Electronic Arts]

Miike, thanks for your nice comments and other analysts as well. Unfortunately, I'm sure I won't get as much skiing as I would like but we are going to refrain from trying to give updates on units because we know that there are already sold less units than we thought we would. But what I would say is as we remember these gains are long tails and no excitement to stretch this out and in someways we hope it benefits FY23 since we've had a pretty strong FY22 and so we're held -- I'll let Andrew address [Technical Issues].

[Andrew Wilson, Chief Executive Officer at Electronic Arts]

I think you remember coming into -- into the launch, the demand metrics were very high. And so that we [Technical Issues] the core underlying created for the game still has really strong demand around it. I think we, as I mentioned with some challenges around stability in particularly our high-end PC machines and performance and there were some design decisions, but not all the community really agreed with. And so, our focus right now is to really go back and make sure we get that stuff right. And as much as I hate to admit it, Deutsche studio that has been able to do this a number of times now and really go back in rebuild of the call and re-engage the community as long as we do that in conjunction with the community. And that's what that studio is so great is doing. So I think the combination of those with the new leadership and a strong vision for the future, we will build out the call, we will re-engage the community and we move manifest that demand that we saw coming launch over the course of time. Mobile is still developing the metrics are showing up really strong. I think right now we're looking at going to the next closed beta at the end of this month, and as is the case of mobile. We continue to tune and test in the environment. And then as it relates to free to play and other modalities play, again we have a big bold vision for this franchise. This franchise since its inception has been a leader in creativity and innovation towards how much players in house and you should expect it. We will continue to work to deliver new and interesting ways to engage with this game over the course of time. And while I'm disappointed with how it -- how it launched, I'm still very excited for the future.

[Operator]

Your next question comes from the line of Eric Handler from MKM Partners. Your line is now open.

[Eric Handler, Analyst at MKM Partners]

Good afternoon and thanks for the question. Andrew, I wonder if you could just talk a little bit about when you think about the expansion that's going down in the industry in the last year or so and we're seeing a lot of user generated content [Technical Issues] on that start to proliferate and seen a lot of venture capital funding into Blockchain and [Technical Issues] gaming wondering how you're thinking about those channels eventually. Is it easier to build from within? Is it better to buy once there is some established players there? Just want to get an answer there.

[Andrew Wilson, Chief Executive Officer at Electronic Arts]

Yes. Great question. I would tell you I started this industry over 20 years ago at that point in time, it was the fastest-growing entertainment industry on planet by a wide margin. I think it has been the fastest-growing entertainment industry on the planet every year since then, but still people seem to be surprised by this. So we're not surprised by it at all, and I think as technology has continued to evolve, we have been able to deliver new and interesting and fun ways to engage with content. What we've seen more recently is just how powerful the social ecosystem -- social networks bored out of engagement now games truly are, and these are now is not now just about ingesting entertainment the same way you do traditional scripted media or traditional broadcast such as music. This is not experiencing entertainment with your friends and that is unbelievably powerful. I think that has been really the fuel that has driven the growth in recent time as part of that, of course, the ability to create their own content can put into that ecosystem I think on a really valuable part of what our industry offers to our players and our fans. The traditional meeting just doesn't and this is something that we hold true again it's been a very center of the seamless for a long time, it's at the very center of like FIFA Ultimate Team and Madden Ultimate Team to the very center of the design a which we'll be launching soon. And so this concept of UGC or User Generated Content is really just an extension of the social interaction that I am able to hobble by friends in and around experiencing what is the best entertainment on the planet and so I believe that's going to be a really important part of our future. Now the extent whether we want to build out over time. Right now, we're building, we're building technology, we're building creating, we're building assets and we're offering it out to communities around the world and we're seeing great uptake of that. If we've acquisition opportunity in the future, we'll ultimately we'll get that, but we don't -- we're not looking at anything at this juncture.

Around the NSG and where BCs are investing again, we see this also now happen [Indecipherable] sort with 3D, sort with ARVR, we're now [Indecipherable] always, there's always something ran out industries that is driving a lot of fixed investment, so what I look at this is collectability is really built on 4 key metrics. That's around high quality content, it's around scarcity, it's around to prove more authenticity, and it's around a group of people that find value in that content and we've seen that happen in the real world and we've seen that happen in the virtual world. We've certainly seen that happen in and around our games for some number of years and I believe the choice ability will continue to be an important part of our industry in the games and experiences that we offer our players. With that as part of the energy in the blockchain or not remains to be seen. And I think the way we think about it is we want to deliver the best possible player experience we can. And so we will evaluate that over time. But right now, it's not something that we're driving hard against.

[Eric Handler, Analyst at MKM Partners]

Thank you very much.

[Operator]

Your next question comes from the line of Matthew Thornton from Truist Securities. Your line is now open.

[Matthew Thornton, Analyst at Truist Securities]

Hey, good afternoon. Andrew and Blake. Absolute best of luck to you in your future endeavors. I guess 2 questions, first for me, you guys talked about in the back half of the fiscal year obviously Battlefield missed that's partially offset by strength in FIFA, Apex, and others. With FIFA in particular I guess you talked a lot about kind of unit strength year-on-year. I'm just kind of curious how you felt about or feel like about your Ultimate Team and the live services component into the -- into the back half of the year. I guess it's first question. Second question, curiously coming back-to-mobile and maybe some of the recent acquisitions kind of curious if you could talk a little bit about how you're thinking about advertising I know it has come up a bit to other companies might get 10% to 20% of their mobile bookings from advertising of Glu brings some new capabilities to. So I'm curious how your that you about advertising, curious how you're thinking about the Glu pipeline, you're almost a year into that deal and then also when we might start to a little more about kind of what your plans are with Metalhead and super mega baseball? Thanks, guys.

[Blake Jorgensen, Chief Financial Officer at Electronic Arts]

I'll start and let Andrew take the second question. While service growth in the quarter was 9% and trailing 12 months is 21% and that's across all of our live services and so if you look at something like Apex or FIFA, they're clearly well north of that and we feel -- continue to feel it is one of the cores of our business because it is reoccurring and highly dependent on the social networks that we've created in our games and particularly on SPORTS those are evergreen networks for continued every year. And so our the metrics, we see our exceptional up well over last year. You look at the Apex numbers as we reported the dramatic improvement year-over-year and everything they do is continuing to try to drive engagement with people that brought a large number of new players into the game players and continue to come up with amazing and unique ideas for ways to play and so we're very excited about how that continues and it continues across all of our sports and we're looking as to how do we do that across more and more games going forward. So I'll let Andrew talk about Glu a little bit.

[Andrew Wilson, Chief Executive Officer at Electronic Arts]

Yes. Again, we are working closely with Glu still relatively early days with the acquisition for both them and Playdemic. We're working both on bolstering our existing 15 live services and building out new ones and as per my prepared remarks, we are projecting well into double-digit growth next year and that includes Apex Mobile and renewed FIFA Mobile at a full year all of Gulf flash and ongoing growth across the portfolio and we're excited about that. With respect to advertising specifically, we are taking the Glu advertising stack and applying it across our games and as early to know just exactly how that will manifest, but based on what we see we expect that that represents some revenue growth there also. So overall mobile now really is a strength of ours. It's a very important part of how we drive growth in the business, both in our existing games in our new launches, and with the potential mobile advertising across the portfolio.

[Operator]

Your next question comes from the line of Drew Crum from Stifel. Your line is now open.

[Drew Crum, Analyst at Stifel Nicolaus]

Okay. Thanks, guys. Good afternoon and Blake best of luck. Curious as to your thoughts on where the businesses in terms of engagement normalizing. Is the reopening headwind behind you or is this something we should anticipate in calendar 22? Is the contemplated in your fiscal 23 net bookings forecast? And then separately, your OpEx growth year-to-date is approaching 30% year-on-year. Should we see that slow materially once you start to anniversary acquisitions or how should we be thinking about OpEx going forward? Thanks.

[Blake Jorgensen, Chief Financial Officer at Electronic Arts]

Yes. I can take the OpEx question quickly, Drew, I mean clearly most of that was driven by 2 things. One is our acquisition, probably the biggest driver of it, but the second is driven by the fact that we've used this opportunity of some questions in the gamer community about which companies are going to be around and which aren't. We've been able to hire some amazing talent turning that because of our stability and so that doesn't continue on forever, obviously, the acquisition growth is a one-time component. So I think we're -- remember our OpEx really comes down to 2 things; headcount and marketing expense. So the marketing expense will swing by the titles that are again in any one year, but we're pretty good at managing that and the intent, we're also very good at managing and so I don't think you're going to see a jump like we've seen this past year. But remember, even with the OpEx growth that you see look at Q3 EPS number, I mean, clearly, we've been able to manage that even with the downdraft in $48 million in revenue that we didn't originally plan. So we are a pretty flexible organization to be able to try to manage that to keep margins going. And so I think you'll see that going forward.

[Andrew Wilson, Chief Executive Officer at Electronic Arts]

On engagement, Drew, post COVID depending on how you think about it. I think we've be on a rolling situation around the world all of coming back and [Indecipherable] coming back. Broadly speaking though much of the world is out and about, they like sporting events, they're going to Theme Parks, they're watching movies, they're going to dinner, so much of the world return mostly to normal at this juncture by our calculation. Even as part of that, we've seen not only number of players grow again over 540 million people now in our network. We've also seen time spent in our games grow by over 20% and I kind of move to that as not just about creating amazing games and entertainment, but it is social interaction. I think what COVID has taught us is that games are right way not just to get out entertainment fixed to remain deeply connected with our friends and fans and rivals and what we're seeing now I believe is actually a long-term effect of the discovery of not just the value of our -- of what we do in terms of entertainment, but also the values in maintaining connections with those we care most about and we would expect that to continue and actually create a flywheel for added growth.

[Operator]

Your next question comes from the line of Jason Bazinet from Citi. Your line is now open.

[Jason Bazinet, Analyst at Smith Barney Citigroup]

Thanks. I think it's a little bit early to talk about this, but I would be very curious about how you're thinking about your business and strategy as it relates to the Metaverse if that becomes more real. Is that -- is that something that you view is just another opportunity for you to engage your fans or this is is a battle about time spent? is it sort of change industry sort of shares or is it just sort of a non-event and you guys think you can sort of continue to focus on their IP and engagement and it's really not material? Thanks.

[Andrew Wilson, Chief Executive Officer at Electronic Arts]

Yeah, I mean, a great question and certainly another one of these things that is kind of the topic du jour at the moment and -- and many people are talking about it in different context quite frankly. At the end of the day, the Metaverse is a 3-dimensional social space where you've come together to experience things with your friends and so for now, much of that happens the 2 dimensional Internet around the social network which we see. But I will tell you a lot of that happens in the context of our games. And as I look at the nature of our games, I look at the engagement that we're seeing inside these 3D spaces that we create in around sports and other -- other world. What you see with our industry is the beginnings of what a Metaverse might be. And over the course of time, you should expect us to continue to expand and extend the world that we have been creating for last 3 years and deliver more experiences beyond the consider the game, so what could you do in the FIFA beyond playing football, what were you doing Need for Speed beyond driving game, what will you do in the Sims as you come together with your friends beyond the creation of content, and you will see that continue to evolve for us over the course of time and I don't know, ultimately, what the Metaverse will become. But what I do know is games we create are becoming more important as social spaces and they are just as places to enjoy great entertainment as we continue to build out those experiences. And as whatever the numbers becomes, it's an over certainty that we will play a very important role in it and that our players will be on the leading edge of the evolution of what this spaces market has.

[Jason Bazinet, Analyst at Smith Barney Citigroup]

That's super helpful. Thank you.

[Operator]

Your next question comes from the line of Mike Ng from Goldman Sachs. Your line is now open.

[Mike Ng, Analyst at The Goldman Sachs Group]

Hi, good afternoon, and thanks for the question. I just have 2 first. I was just wondering if you could talk a little bit about EA Play where are we with EA Play subscribers say and how do you see the outlook for video subscription services changing particularly with recent consolidation. And then second, it was encouraging to hear the reiteration of the mid to high single-digit topline growth for next year. I was wondering if you could go a little bit more in detail around some of the drivers what do you see driving some of the FIFA strength and are there new games or unannounced titles embedded in that outlook? Thank you very much.

[Andrew Wilson, Chief Executive Officer at Electronic Arts]

Now, let me quickly hit on the EA Play component and then I'll let Blake talk about the mid to high single-digit growth. EA Play continues to grow for us to continues to be really, really positive consumer experience getting access to some of the greatest content in the industry. What -- what we see more broadly across entertainment is a subscription continues to be a core driver and what we're able to do is drive ongoing engagement perhaps in a way even stronger than traditional linear and scripted entertainment. I think that you'll -- we will continue to see consumers engaging our content through subscription and will continue to provide our content that way and I think we'll start to see more and more growth across platform and we continue to be the leading provider of a gaming subscription cross platforms in our industry and with the depth and breadth of our portfolio and the new experiences the course of time back to my point around entertainment you might expect us to do more things beyond just games in the context of that subscription around a broader service for our players and we're pretty excited about what that might become over the course of time.

[Blake Jorgensen, Chief Financial Officer at Electronic Arts]

On the 23 question, obviously, as we said, we're not yet ready to give guidance which we know and our keys to driving growth are obviously our core portfolio, things like FIFA for example and live services associated with it and showing amazing growth. We will have entertainment in the market. We don't know exact [Technical Issues] global build for that game as well as the Chinese build for that game, and we're working with a partner there and things are going very well in test but we're [Technical Issues] driver. We will have more growth we think out of the FIFA mobile game that we just put into the market. And remember that we only had [Technical Issues] booked really half of the year of Playdemics called flash game. We'll have a full year of that next year, and we're working with Playdemic on SPORTS areas where we have licenses already. And then, we've got a Need for Speed coming and there are 3 or 4 more things that we haven't announced yet, but you can imagine, we are always trying to find ways to grow the portfolio year-over-year through new titles [Indecipherable] and expansion and as well acquisitions which right now, we're in the digest mode, but it doesn't mean that we would not keep looking at everything going forward. So we're excited about next year. It looks like a strong year to come. And as Andrew said, we know that this is one of the greatest entertainment vehicles in the world right now until we're really in the sweet spot and that's what gets us excited about it.

[Mike Ng, Analyst at The Goldman Sachs Group]

Great. Thank you both. That's incredibly helpful and Blake, best of luck in your next chapter.

[Blake Jorgensen, Chief Financial Officer at Electronic Arts]

Thank you.

[Operator]

Your next question comes from the line of Mario Lu from Barclays. Your line is now open.

[Mario Lu, Analyst at Barclays]

Great. Thanks for taking the questions and Blake, it's been pleasure interacting with you over the years.

[Blake Jorgensen, Chief Financial Officer at Electronic Arts]

Appreciate that.

[Mario Lu, Analyst at Barclays]

I guess the first question is more high level you guys sit in your slides spending -- playing time is increased 20% this quarter compared to the year prior. What was the largest driver of that, what's the typical lag historically between growth in time spent and monetization? And then secondly, you guys do not really talk about Madden as much on this call. So just wondering what the delta is between performance versus like a FIFA are things like maybe you passing FIFA kind of driving a growth hear, anything out of Madden you can talk about?

[Andrew Wilson, Chief Executive Officer at Electronic Arts]

So let me -- let me start with Madden. Madden is also having a great year. And we're seeing tremendous growth. As you know [Indecipherable] follow the season, this has been an unbelievably exciting season of football, and [Multiple Speakers] it was exciting for a second and then it was the the playoff games and the season overall has been an unbelievably exiciting game, the ratings for the NFL has been extremely strong through the year and that's driving really strong engagement in and around our Madden franchise and they continue to go from strength to strength.

[Blake Jorgensen, Chief Financial Officer at Electronic Arts]

With respect to what drove engagement, again, we have this great portfolio and what we certainly saw extraordinary growth in Apex Legends, we saw great growth in FIFA, we also saw growth across the portfolio and on Apex was 30%, FIFA was -- EA SPORTS portfolio was at 10% on what is a very big number, but we've seen growth across the portfolio and that speaks to the value of the breadth and the depth of our portfolio. In terms of lag between engagement and monetization growth, which I think was one part of your question, I don't have exact numbers for you on that. Well, it is our teams work very closely with the communities and ensure that they always providing new and interesting content and what we know about all our communities by play if they make a choice, do they want to invest more time and they want to invest more money to be experienced and it's really the ability to build that balanced ecosystem that speaks to the strength of our live services over time and so it's very symbiotic relationship that happens between investment of time investment money over -- over the course of the experience and our teams have become very, very good at that and work very, very closely with their communities.

[Andrew Wilson, Chief Executive Officer at Electronic Arts]

Yes, one thing I'd just remind everybody, and we may have already said this, but I'll say again, we shifted last year FIFA in the 3rd quarter. June as a pandemic we delayed is 3 weeks to move into 3rd quarter. We shifted this year in the second quarter. So when you look at the growth of the 3rd quarter and knowing that that didn't include year initial shifting up FIFA it's almost hard to believe the strength of the business. And so I just want people not to forget that and we're not going to provide numbers or details around that exactly but just know that to see the growth that we saw after having moved it back to the second quarter, it's pretty impressive.

[Mario Lu, Analyst at Barclays]

Very helpful. Thank you.

[Operator]

Your next question comes from the line of Andrew Marok from Raymond James. Your line is now open.

[Andrew Marok, Analyst at Raymond James]

Thanks for taking my question and wanted to pass my best wishes onto Blake as well. An Apex Legends, season 12 seems like a more substantial content drop in a typical season. So whether it's amounts of content or type of content. Is there anything that particularly stands out as a driver for new player acquisition and engagement whether it's game modes, new maps or things like that? And then second on FIFA around the growth in unit sales year-over-year I guess at this point, who is interested in FIFA 22 that maybe wasn't in FIFA 21, were there any particular markets or customer segments that saw solid unit growth? Thank you.

[Andrew Wilson, Chief Executive Officer at Electronic Arts]

While some detailed questions and the great questions, so thank you. On Apex again as we -- as the teams put together the seasons of content and I think about new content and new modalities apply and new ways to connect. Remember Apex is now well over 100 million players. And so there is no one size fits all component that really attracts new players or engages in any broad replies deeply. I think what the Respawn team and the Apex team in particular have been able to demonstrate is they worked very closely with the community, they deeply engage with their community, and they're delivering content modalities applying maps, these things that really speak to what the community is asking for and what we've seen since the very beginning of the launch of this game is then we work in a very calculated way around the delivery of really interesting new content, new maps, and new mode as applied on a season by season basis that has continued to grow the overall player base, continue to grow the overall experience, continue to grow the engagement that has the experience and investment those plays in 19 as part of their engagement and so we're very excited about that.

And then with respect to FIFA, again, this is another team that has demonstrated the power of working very closely with the community in around a live service. Football software as we call this country continues to grow. The leagues, the teams, the players are going from strength to strength in popularity. We have on the 300 licenses in the game. And turning to partners that we work with in the provision of what is a growing broadening deepening experience for our player base and as the world of football grows as we build our fan base again here if you think about the fan base we have for our product overall service, it's the largest digital Football Club in the world with well over 100 million fans and we were very close to that fan base around their ability to experience football in a way that's most meaningful to them round their leagues, around their teams, around the place they love. And the reason why I would continue to drive growth in and around that franchise is because we do work very closely with our global community of fan and we are delivering them again content gameplay modalities of play that is most interesting and most exciting to them and connect at most deeply with the sport they love and the fans they love with.

[Andrew Marok, Analyst at Raymond James]

Thank you.

[Operator]

Your next question comes from the line of Doug Creutz from Cowen. Your line is now open.

[Doug Creutz, Analyst at Cowen]

Hey, thank you. Paramount Plus dropped to a pretty expensive looking halotrailer over the weekend and Netflix has had some success with the Witcher and Legal Legends on their streaming service. There is absolutely this demand for content and right now from the half a dozen or so streaming services and you guys have some IP particularly within where that I think would be pretty, pretty good as a basis for show. Are we -- are we finally at a point where videogame IP has some meaningful transmedia opportunities or do you think that's still more theory than a reality?

[Andrew Wilson, Chief Executive Officer at Electronic Arts]

No, I think based on exactly what you just said and what we've experienced, videogame IP or interactive entertainment IP is now some of those culturally relevant IP in all of the entertainment and I think that's going to continue to grow when you think about hundreds of millions of fans engaging in and around the IP we create like Apex, like the Sims, like Need for Speed, like our by way of franchises, like Dead space, like Escape, it's not natural, so that's sort of scripted entertainment element. I think traditionally the scripted entertainment elements in our industry have not been big revenue drivers in and of themselves. But where they had been a high quality and have lifted the overall engaged in the franchise more deeply this kind of a one-2 punch that drives growth in the business. I think as we think about our future, we do believe that this thing that we do that is interactive entertainment is becoming more and more important on a daily basis to all fans and that our fans are going to one we experience that in many different modalities, and some of that might be scripted entertainment in nature and you should expect that where we're looking at any and all aspects that allow us to extend and expand our brands for our fan base. But we're doing it very thoughtfully and again as part of our strategy doing that profitably.

[Doug Creutz, Analyst at Cowen]

Great. Thanks, Andrew, and best wishes Blake.

[Blake Jorgensen, Chief Financial Officer at Electronic Arts]

Thanks, Doug. Look that's the last question. I appreciate everyone's [Indecipherable] and I'll be around for a while and make sure that we get our new CFO, fully on board. And as I said, he'll be much better than me, so everyone stay healthy, and we look forward to talking to you next quarter. [Operator Closing Remarks]