Videogame Publishers Win With Sports Titles -- WSJ

By Sarah E. Needleman 

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (August 19, 2019).

Electronic Arts Inc. kicked off the videogame industry's annual sports season with a strong start for Madden NFL, showing the resilience of decades-old franchises as technological strides enable game developers to engage players with new modes and online competitions.

The latest installment, "Madden NFL 20," was the best-selling game in the four weeks that ended Aug. 3, even though it was only released on Aug. 2, market-research firm NPD Group said in a report last week. The football videogame is now the eighth-best-selling U.S. title this year, according to NPD. The report didn't disclose the total number of units sold.

Other annual sports simulators have shown durability. Take-Two Interactive Software Inc. said earlier this month its most recent basketball game, "NBA 2K19," sold a series record of about 12 million units. EA said last month that net revenue from the Ultimate Team mode in its FIFA franchise rose 11% from a year earlier.

A new installment of NBA 2K, which made its debut in 1999, is due in early September. EA's "FIFA 20," the latest version of a franchise that started in 1993, and "NHL 20" are expected to be out next month.

Madden, which launched more than 30 years ago, is typically among the top-10-selling games in the U.S. each year, according to NPD, ranking No. 4 in 2018. "NBA 2K19" finished the year at No. 3. The FIFA game and Sony Corp.'s "MLB: The Show" didn't make the top 10 but are still strong sellers, said NPD analyst Mat Piscatella.

Sports games are a key part of videogame makers' portfolios. EA's sports portfolio alone generates roughly $3 billion in annual revenue, or about 60% of the company's total, according to an estimate from investment-research firm Bernstein. Take-Two's sports games are on track to make up around 38% of total revenue in the current fiscal year, Bernstein said.

Industry analysts credited the long-term success of sports simulators largely to advances in technology that have given publishers the ability to update their games after release to reflect athletes' real-world performance. That has made the games more engaging for longer stretches of time, they said, and thus more lucrative.

Kobi Simmons, 21 years old, said he has bought every Madden installment since he was in grade school. He likes that EA regularly updates the game with new modes and other features.

For example, this year EA added to Madden NFL a mode that takes players on a journey as a star quarterback. The game's roster of players changes with each installment.

"You have to buy the game each year if you want to play with the new players," said Mr. Simmons, of Fair Lawn, N.J., referring to rookies including the Arizona Cardinals quarterback Kyler Murray.

The trend of frequently updating sports games is rooted in the development and popularity of consoles including Microsoft Corp.'s Xbox One and Sony's PlayStation 4, which connect to the internet. As more people play games online, developers have poured more time and money into creating content for games with well-defined fan bases, as opposed to taking chances on entirely new properties.

"The constant updates keep fans coming back day after day," said Stephens analyst Jeff Cohen.

On an earnings call with analysts earlier this month, Take-Two Chief Executive Strauss Zelnick said people used to play NBA 2K games for only about three months. "Now it's a nine-, 10-month experience, and we think it's going to grow to be a full, one-year experience," he said.

Jason Argent, an executive at Take-Two's 2K studio, said Friday in a statement the company is "constantly looking for new ways to deliver an entertainment experience that captures the different aspects of basketball both as a sport and a culture."

An EA spokesman said Friday that player sentiment for Madden is the highest the company has ever seen. "We brought a ton of innovation to Madden this year," he said.

Esports leagues and tournaments dedicated to sports games are another, newer draw. FIFA, Madden and NBA 2K all offer fans the option to participate in competitions that offer prize money.

Corrections & Amplifications Kobi Simmons lives in Fair Lawn, N.J. An earlier version of this article incorrectly spelled the town's name as Fairlawn. (Aug. 18, 2019)

Write to Sarah E. Needleman at [e-mail]

(END) Dow Jones Newswires

August 19, 2019 02:47 ET (06:47 GMT)

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