Good afternoon. My name is Suzanne and I’ll be your conference operator today. At this time, I would like to welcome everyone to the Electronic Arts Q4 2020 Earnings Conference Call. Mr. Chris Evenden, VP of Investor Relations, you may begin your conference.

Thank you, Suzanne. Hi, everyone. Welcome to EA’s fourth quarter fiscal 2020 earnings call. With me from their homes today are Andrew Wilson, our CEO; and Blake Jorgensen, our COO and CFO. Please note that our SEC filings, our earnings release, our financial model, and our earnings slides are available at ir.ea.com. We will post an audio replay, a copy of these prepared remarks and a transcript after the call. With regards to our calendar, our Q1 fiscal 2021 earnings call is scheduled for Thursday, July 30, 2020. Many of the usual opportunities we have to meet with investors, such as conferences, are unavailable at this time. We’re building out a program of virtual tours to reach as many of you as possible over the coming weeks and months, directly and through partnering with sell-side analysts. 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. And note in particular that these forward-looking statements may be affected by risks related to the COVID-19 pandemic. We refer you to our most recent Form 10-Q and our earnings release for a discussion of risks, including those related to COVID-19 that could cause actual results to differ materially from those discussed today. Electronic Arts makes these statements as of today, May 5, 2020, 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. And now, I’ll turn the call over to Andrew.

Thank you, Chris. This is a difficult time for everyone. As global citizens, we are all experiencing significant uncertainty while continuing to combat the spread of the coronavirus pandemic. We are here to discuss our quarterly results for the fourth quarter of fiscal year 2020, which Blake and I will address. However, our primary focus has been on the health and wellbeing of our teams and their families during the COVID-19 situation. I’ll start by sharing some actions we’ve taken to support our employees globally. We established an internal COVID-19 task force that has been monitoring conditions and making daily decisions since January to ensure our teams' safety, which included timely restrictions on business travel, canceling events, and closing our Shanghai and Seoul offices. By mid-March, we transitioned almost our entire global workforce to work from home in response to the escalating pandemic threat. During this shift, we concentrated on equipping our people with the necessary resources to manage the challenges of work and home life during stay-at-home orders and social distancing. Currently, all our locations outside of Shanghai remain in a work-from-home status. We have detailed plans to assess our readiness to return to our offices when the time is right, taking into account guidance from health authorities and government, our employees' comfort levels, and preparing our facilities for ongoing physical distancing. We intend to phase in our return gradually while implementing longer-term changes in our locations and practices in response to the pandemic. We will continue to support our teams as we move forward. Regarding our results, we concluded a strong year for Electronic Arts, with fourth quarter and full-year revenue and earnings exceeding our previously raised guidance. The innovation we provide to players across our games and live services continues to underpin our business success. I’d like to highlight a few examples from the year. EA SPORTS remains a core part of our portfolio, continually bringing players together. FIFA is one of the largest and most engaging entertainment franchises worldwide, with around 100 million players interacting globally in our FIFA franchise, and over 25 million unique players have joined FIFA 20 thus far. VOLTA has introduced a new dimension to the game, and FIFA Ultimate Team continues to expand as the most popular mode. FIFA Online in Asia also maintains momentum, significantly exceeding our expectations. Madden NFL is a cultural icon across football, gaming, and entertainment, achieving its largest year ever. We adopted a new approach for introducing new modes of play in Madden NFL 20, resulting in the highest engagement levels in franchise history. Apex Legends was the most downloaded free-to-play game on PS4 in 2019 and continues to develop as an innovative long-term service for players. It has consistently been recognized as one of the best multiplayer experiences available, with each new season of content delivering what players love, from lore to new Legends to in-game events. Prior to the COVID-19 stay-at-home orders, Season 4 was already outperforming the previous two seasons, and the Old Ways event in April has become the most successful ever for Apex. Our Apex esports tournaments have achieved about double the average viewership of other top esports leagues. Respawn has added more teams to our development organization to create exciting new content, maintaining a strong focus on the thriving Apex Legends community. Star Wars Jedi: Fallen Order has emerged as one of the standout titles in recent years, with over 10 million unique players since its launch, a significant milestone for a first entry in a new franchise. It’s an exceptionally well-designed game, providing fans with an immersive and unique Star Wars experience. The Sims 4 appeals to a different gaming audience that continues to expand. It offers a completely distinctive experience unlike anything else in the market, and FY20 was its best year since launch. Every quarter of this year, monthly average players in The Sims 4 surpassed the previous year's figures. Our Sims community is diverse and highly creative, and our success is built on providing a wide range of content and engagement opportunities for players with various interests. With more people at home in the fourth quarter, we observed increasing usage and engagement levels in many of our games. We’re grateful that people want to connect through our games during this time. This has been made possible largely due to the fantastic work of our teams and our technology investments across the company. For over five years, we have been investing in a unified technology infrastructure, architecture, and digital platform as we transition into a digital world. This has allowed us to offer mobility for our employees in this environment and maintain strong productivity. However, the real story is the incredible people at Electronic Arts. They have come together in a fast and inspiring manner throughout this pandemic response period, supporting one another and our players. Consequently, we have been able to adapt and scale in this evolving landscape, where engagement in our games has reached new heights and remains elevated through the current quarter to date. We have been focused on our players during this time. Our talented studio teams have delivered exceptional live service content while working from home, including FIFA Ultimate Team events, Madden Ultimate Team content for the NFL Draft, and new additions to Star Wars Galaxy of Heroes. We also initiated our Stay Home, Play Together campaign to provide special experiences for our players as shelter-in-place orders commenced in March. Thanks to our teams' dedication and our partners’ support, we’ve launched numerous Stay & Play programs, including special community livestreams and giveaways, and celebrities and athletes playing our games with fans. Our esports teams have developed a fully cloud-based broadcasting platform that enables us to create high-quality esports content with competitors, hosts, and production staff all safely at home. So far, we have conducted major online tournaments for Apex Legends, Madden NFL 20, FIFA Online 4, and FIFA 20, including the FIFA Stay & Play Cup, a $1 million charity tournament for COVID-19 relief that brought together top European clubs and footballers and reached audiences in over 100 countries. We have executed or plan to execute over 100 online esports events featuring celebrities, athletes, communities, and charity efforts in the coming months. This global crisis has also severely impacted local communities, and we have increased funding for our charitable match program to support organizations globally. Our teams have been doing incredible work in their communities, from sourcing personal protective equipment for healthcare workers to food drives and more. We are here to support them in every way possible. I want to express my immense gratitude to all the people at Electronic Arts for making this possible. Thanks to their swift and determined efforts, we’ve responded effectively to this global challenge, and we're well-positioned to connect more players through outstanding games and content and to support our communities where they need it most. Looking to FY21, we are expanding our portfolio of high-quality and innovative new games. We plan to launch 14 new titles for players this fiscal year, including four new EA SPORTS titles: FIFA, Madden, NHL, and one additional unannounced sports title, all of which embody the creativity, authenticity, and quality that distinguishes EA SPORTS. EA SPORTS will also take the lead on the next-generation consoles this year, and we look forward to sharing more about those innovations soon. Our FY21 plans include four additional games utilizing our extensive intellectual property, from Command & Conquer Remastered to upcoming titles for our console and PC. We will also introduce more games from indie developers this year through EA Partners and release two new mobile titles based on popular IP for players worldwide. Leveraging our teams' expertise in live services, we are building some of the largest ongoing experiences in the industry. We have much more planned for the growing Apex Legends community this year, starting next week with Season 5. Maxis will continue to provide Sims 4 content that fosters self-expression and nurtures the creativity of our diverse player base. In addition to the new EA SPORTS games, we will ensure that fans remain connected to sports through our live services, even if real-world leagues and teams are not yet active. We are also working to bring additional content to FIFA Online and Apex Legends in Asia to excite current players and attract new ones. This year, we plan to grow our communities across various platforms and play styles. Following our announcement with Google Stadia last week, we intend to expand our games' availability across more digital distribution channels. We will extend our subscription service to a fourth platform on Steam and plan to launch several EA games for Nintendo fans on the Nintendo Switch this year. As we enter FY21, our outlook for the year is robust. However, we acknowledge the uncertainty ahead with the ongoing COVID-19 situation. Macroeconomic challenges, the status of sports seasons, potential impacts on our business partners, and long-term effects on our productivity in a global work-from-home environment are factors we will monitor closely, as they may influence player behavior and our ability to meet our planned schedules. We are grateful for the exceptional individuals at Electronic Arts and their commitment to one another, our players, our communities, and our company. Now, I’ll turn the call over to Blake.

Thanks, Andrew. We’ve had a strong year. But it is impossible for me to reflect on the past 12 months without acknowledging that we are all currently going through a very difficult time, and I hope that you and those close to you are healthy and safe. I’d like to focus on the impact we’re seeing on our business. First and foremost, we are concerned for the safety and wellbeing of our people. Andrew has given you a brief introduction to the measures we have taken and continue to take. Teams across the Company have shown extraordinary innovation in meeting the challenges of delivering games from home. Developing a game from home inevitably carries risks, and we haven’t yet solved all the problems, but, for example, we just had a very successful FIFA Ultimate Team birthday event; Apex Legends Season 5 is about to launch; and we expect to see the next Sims expansion and Command & Conquer Remastered to both launch in June as scheduled. Learning from this period will forever change the way we work at EA. Secondly, there is a question as to how this might affect how players behave. From Andrew, you’ve heard that people are playing our games a lot more, and we’ve seen a corresponding large rise in live services revenues that continues today. Our results this quarter prove the value of the live services path we’ve been on now for a decade. The breadth and depth of our live services give us tremendous flexibility at times like this, to meet player needs in a variety of ways. The closure of physical retail has not yet affected the sales of full games, with sales actually above where we would expect them to be at this time of year. This suggests that people who want a game are finding a title in our catalog, and downloading a digital copy or ordering a physical copy online. In addition, the shift to digital since the last recession reduces both the impact of store closures and of inventory risk. Physical game sales comprised 84% of our annual net bookings in fiscal 2009, compared to only 20% last year. Turning to our results. I’ll report them on a GAAP basis, then use our operational measures of net bookings to discuss the business dynamics. To compare results to historically reported non-GAAP measures, please refer to the relevant tabs in our downloadable financial model. GAAP net revenue for the fiscal year was $5.54 billion, cost of revenue $1.37 billion, operating income was $1.45 billion, delivering an EPS of $10.30, including one-time net tax benefit of $5.97 that we previously discussed. These results enabled us to deliver free cash flow of $1.66 billion. Total net bookings for the fiscal year were $5.21 billion, up 5.4% year-on-year. At constant currency, growth would have been over 7%. Digital net bookings accounted for $4.05 billion of this. Live services net bookings were $2.78 billion, up 15% year-on-year, driven by strength across our business. Moving on to the details of our fourth quarter. GAAP net revenue for the quarter was $1.39 billion, above our guidance by $62 million. Operating expenses were $717 million, slightly less than we guided. Operating income was $401 million and resulted in earnings per share of $1.43, $0.38 better than our guidance. Operating cash flow for the quarter was $498 million, down $101 million from last year, driven by increased royalties and cash taxes paid. Capital expenditures for the quarter were $40 million, resulting in a free cash flow of $458 million. You can see this in our earnings slides for further cash flow information. During the quarter, we repurchased 2.7 million shares at a cost of $291 million. Since quarter-end, we have completed our two-year, $2.4 billion repurchase program. Due to the uncertainty in the market and in the economy, management and the Board have chosen to postpone a review of our capital return plans until next quarter. Let me emphasize that this is a precaution; our business today is extremely strong. Our cash and short-term investments at the end of the quarter were $5.74 billion. Our balance sheet is very strong. With regards to debt, we have $1 billion in senior notes, with $600 million maturing in March 2021, and $400 million due in 2026. Our debt equates to significantly less than fiscal 2020 free cash flow. Now, I’d like to turn to the key drivers of our business in the quarter. Net bookings were $1.21 billion, well above our guidance of $1.15 billion, driven by our digital business. Digital net bookings were $1.12 billion, with the beat versus expectations driven by The Sims 4 and Apex Legends. Digital net bookings represented 78% of our business on a trailing 12-month basis, a new record. This compares to 75% in the prior year. Live services net bookings were $789 million. The year-on-year decrease is driven by the massive launch of Apex Legends a year ago, offset by growth across the rest of our live services. Ultimate Team grew strongly through fiscal 2020. Mobile delivered net bookings of $138 million, up 2% year-on-year, driven by our sports titles in Asia. Full game PC and console downloads generated net bookings of $190 million, down 11% from last year, driven by the launch of Anthem in the year-ago quarter, partially offset by the ongoing shift to digital. Overall, 49% of our units sold through were digital rather than physical, measured on Xbox One and PlayStation 4 over the last twelve months, and we continue to model underlying growth at 5 percentage points per year. Looking ahead to the next 12 months, we are focused first and foremost on supporting our people, helping them cope with the world in which we find ourselves. Second, we are focused on enabling them to deliver the new content we’re providing to our players through live services and the new games we have on our slate. The market outlook is uncertain, but we’re basing our modeling on the gaming software market growing in mid-single digits in calendar 2020, with mobile up 7%, console up 5%, and PC up 5% in dollar terms. In addition, although our sports live services are currently performing extremely well, it is not yet known when professional sports might resume, nor what the impact on our business might be if that takes some time. In the meantime, our esports activities are proving to be a popular competitive outlet for football, soccer, and hockey fans. There are also risks associated with our ability to deliver new games. The guidance I’m about to provide is predicated on the title slate as outlined in the earnings presentation on our website. Note that this slide only identifies those titles that are already announced. As we have previously stated, our FY21 revenue forecast includes additional titles from both EA and third-party studios that will be announced in coming quarters. We’re not seeing material impact on our FY21 title slate, but that could change, and the risk is higher for third-party titles, where we have less control. Finally, with regard to the potential impact of the recession. The video game market has historically proven resilient, as players have seen games as a relatively inexpensive form of entertainment. Nevertheless, future economic indicators are extremely weak and may affect our business. Before I get to the numbers, let me also discuss three changes we are making with regards to reporting. First, we will present GAAP net revenue in the income statement as one item, rather than as product and service. Secondly, we will report mobile bookings gross of platform fees, instead of net, to align with industry practice. Finally, we are updating the presentation of net bookings by composition to focus on full game and live service sales, in line with the direction we continue to drive the business. We’ve published more details on our IR website. Guidance for fiscal 2021 is for GAAP net revenue of $5.525 billion, cost of revenue $1.382 billion, and GAAP EPS of $3.35. As you compare with last year, remember FY20’s GAAP EPS includes a one-time tax benefit of $5.97 per share. We continue to forecast our management tax rate for fiscal 2021 to be 18%. With regards to cash flow for fiscal 2021, we expect operating cash flow to be approximately $1.575 billion. We anticipate capital expenditures of around $125 million, which would deliver free cash flow of about $1.45 billion. Free cash flow is down slightly year-on-year, with higher underlying profits more than offset by higher cash taxes, higher variable compensation, and lower interest income. Turning to business drivers, we anticipate net bookings for the year to be $5.55 billion, up 3.3% year-on-year on a like-for-like basis. Growth is primarily driven by live services, strong sports launches, and a broad portfolio of partner titles. Our projections assume a headwind from FX to net bookings of roughly $60 million, although we’d note that exchange rates are likely to be more volatile in the near term as the result of market uncertainties introduced by the pandemic. Both of these numbers are net of hedges. Our currency assumptions are disclosed in our earnings presentation on our website. Drilling down further into the key drivers of our full-year net bookings guidance, we expect live services and others to be $3.85 billion in fiscal 2021, up 7% compared to fiscal 2020; and full game net bookings to be $1.7 billion, down almost 5% year-on-year. Finally, with live services, we expect mobile to deliver net bookings of $721 million in fiscal 2021, up 1% on a like-for-like basis. On a management reporting basis, operating expenses will grow 2% in fiscal 2021, reflecting tight expense control in the face of macroeconomic uncertainties. We expect Q1 net bookings to be $1 billion. While we’re seeing very strong engagement and net bookings growth to date, we’re only a month into the quarter, and our current levels of engagement and monetization could subside as stay-at-home orders are eased and lifted. In addition, the swing factors discussed above in these unprecedented times are potentially huge, impossible to forecast and beyond our control, thus we are taking a more cautious view than normal. As usual, we’ve presented the quarterly phasing of our net bookings in our earnings presentation. Note that this year the phasing includes the effect of revenue recognition from the games we are launching for the current generation of consoles that can also be upgraded free for the next generation. We’ve made a preliminary estimate of that impact in the phasing, but it should be noted that this will not affect net bookings for the full year nor cash flow, just the timing of recognition. I’ll finish by personally thanking everybody at the Company for rising to the challenge. Every one of you have shown energy and ingenuity to enable us to deliver games and content at a time when players want them the most. Thank you. With that, I’ll hand it back to Andrew.

Thanks Blake. We feel very fortunate at Electronic Arts to have the opportunity to bring games and entertainment to people around the world. That’s true every day, but it’s especially true during this unprecedented situation. Our ability to fulfill important motivations for players, such as inspiration, escape, social connection, competition, creation, and learning has brought more people to connect and spend time in our games in the recent weeks and months of COVID-19 stay-at-home orders. We’ve seen games be a source of joy for hundreds of millions of players. We will now look to be delivering for these players for a long time to come. Our focus continues to be on delivering great games and content through the breadth and depth of our portfolio, in our ongoing live services, and by connecting more players through our games via more distribution channels and platforms. With the incredible determination of our teams, we’ve been able to keep producing new experiences from our homes around the world. As we continue to work through this global challenge, we plan to continue delivering a lot of new games, new experiences, and exciting ways to play this year. How we live, work and play will undoubtedly be changed by the COVID-19 pandemic. We’re humbled that games have been part of how people are coming together. We will continue to serve our people, our players, and our local communities by helping them in any way that we can. To everyone listening in to this call, please be safe and be well. Now, Blake and I are here for your questions.

Thank you. Your first question comes from Matthew Thornton with SunTrust. Your line is now open.

Hey Andrew, hey Blake. Thanks for taking the questions. Maybe two if I could. You guys have talked a little bit about Battlefield, being pushed out to fiscal ‘22. Wonder if you could maybe just give us any other color or comments or thoughts on other kind of pipeline projects as we look out in the out years. And then, secondly on Apex, just wondering if you could give us any incremental thoughts or color around the launch on mobile, progress in China, any minimum guarantee that might fall into this year? Any color you can offer there would be helpful. Thanks guys.

Let me take the kind of out year projects and maybe Apex in Asia. First, I would say, Battlefield is progressing very, very well. We’re excited by what the team’s doing. And again, in the context of the work-at-home environment that has been truly inspirational and how that continued to develop great entertainment in the context of our Battlefield universe. So, I’m excited for when next year comes. In terms of specific announcements around what might be coming in the out years, I would tell you that we don’t have anything to announce today. But more broadly, you should imagine that we’re going to continue to invest heavily in our EA SPORTS branded properties, bringing some new properties back over the coming years. We’ve talked before about having new IP in development, both for console and PC and for mobile. We’re excited about that. I’d also say we’ve got a number of new incubation products that are starting to come together that are looking exciting for the future as well. So, I don’t think we’ve ever had as robust a pipeline of content ahead of us as we have right now. I don’t think we’ve ever had the level of execution that we’re seeing around the development of launch of content and the management of ongoing live services than we have right now. And while there are always challenges and interesting hurdles that we face delivering great interactive entertainment experiences, I would tell you I’m very excited by what I see more so than I have been for our pipeline for a long time. With respect to Apex, I think it falls into that category. We don’t have any specifics or announcements beyond what we’ve already talked about, other than to say, I just saw the results of our Season 5 trailer for Apex today. So, we dropped it. It has a 99% approval rate and is the top trending video on YouTube games today. That in conjunction with some gameplay we saw in our Apex mobile title, I feel very excited about that franchise overall.

I want to mention that we are making good progress with our partner in Asia on the Apex mobile and PC project. We are very enthusiastic about the developments. The expectations for this fiscal year are quite modest, so I don’t foresee any risks if it takes more time to release. Our partner is working diligently to expedite the launch. I agree with what Andrew mentioned earlier. If you take a look at the Season 5 trailer, you'll see that we are continuously enhancing this live service, which is what makes it so exciting. We are introducing new and engaging content. Additionally, keep in mind that the team created a significant part of this game remotely, which is an important achievement that should be acknowledged, as it is not an easy task. We initially thought it would be impossible, but so far, it has been incredible what the teams have accomplished while working from home. Make sure to check out the trailer.

Your next question comes from the line of Eric Sheridan, UBS.

Maybe two questions. I think investors have struggled with sort of understanding maybe the rate of change of engagement and monetization. Is there a way to sort of frame either specific titles or across your portfolio what you’ve seen in March and April versus what historical trends have been in January and February before the new normal? And then, a bigger picture question. Are there any learnings you’re getting from this period in March and April that are informing the way you’re thinking about either product development or ways in which to tie engagement and monetization more broadly together, as you think about the long-term future for gaming? Thanks so much, guys.

Let me begin with the first part, and then Andrew can discuss the development aspect. As many are aware, the latter half of this year did not include any new titles, unlike last year. We certainly gained from continued sales of Jedi: Fallen Order, which performed well, but this quarter was primarily focused on live services. The results clearly exceeded our expectations and guidance. Key contributors to this success included Apex, our ultimate team businesses, and our extensive catalog of titles. There is often an underestimation of the importance of both our catalog and live services at EA. We continue to expand our live services that foster social engagement and allow players to enjoy their favorite experiences. In a period when traditional sports were absent, we effectively filled that void for our audience. The engagement levels and revenue growth we witnessed across Madden, FIFA, and hockey were remarkable. Madden, in particular, experienced the most successful year ever, including for Madden Ultimate Team, largely due to the outstanding efforts of our game teams who enhanced Madden with exciting new modes and features. We are also incorporating those elements into Ultimate Team. It's crucial to recognize that the stability of our business stems from the robust system we have established around live services, supported by the strength of our extensive portfolio. Andrew, I'll pass it to you for insights on development.

Yes. So, I would take it in three categories. One is, are there any metrics that we could point to just kind of speak to the level of elevation we’ve seen. I would tell you that FIFA hours watched in April were up 135% over last April, and are up 115% for Madden. Esports TV broadcast hours in the U.S. in April were up 250% over last year. And April alone was 30% bigger than all of calendar year 2019. So, we’re seeing tremendous engagement in the unbelievable creativity and innovation that our teams are delivering. As we think about this on a go-forward basis, I think of that in two buckets. One is, just how do we think about building games going forward and how do we think players will engage as things start to return to normal? Again, I would take this opportunity to celebrate the creativity and ingenuity of our teams. They have been truly inspirational in how they have come together and how they work and build games and create games and deliver epic entertainment to our global audience of players. We had already, over the last five years, started to move towards a distributed development model. We utilized the best creative talent in a number of different regions around the world to come together and build spectacular entertainment for players. I think what we have learned through this process is that there are new areas of innovation and creativity that we can unlock in a distributed model. Some of the foundations that our teams are building in the context of developing games, developing motion capture, and developing commentary of filing games are going to be really helpful for us on a go-forward basis. I also spoke to in the prepared remarks about how our esports teams have built a fully cloud-based broadcast model. Again, we have a wonderful facility at our head office, and we’ll use other people’s facilities to bring people together and broadcast esports events. But, we’ve been able to deliver hundreds and hundreds of hours of esports content completely remotely with hosts, broadcasters, players, and fans all safely at home. I believe this will accelerate our ability to develop and deliver amazing esports content to a global audience and continue to fulfill the insatiable appetite that is absolutely there that we’re seeing right now. As it relates to gamers. Again, I think it’s too early to tell. But, a few things we know are true. One is that games fulfill these core motivations that we have, the ones I talked about in prepared remarks like inspiration and escape and social connection and competition and creation and learning better than just about any other form of entertainment on the planet. And there are many, many new players who are coming and discovering just how wonderful games are and the joy of games and how spectacularly they can bring people together. Our expectation is that people who have invested this time and built relationships with friends through new games they are playing will continue to drive engagement over the long term. Our objective, of course, is to fully support them as they move through this COVID-19 phase and ensure that we’re able to continue to fulfill the motivations they have, even as we get on the other side of this.

And your next question comes from the line of Laura Martin of Needham. Your line is open.

Hello, there. Thanks for taking the questions. So, it sort of sounds, Andrew, from a lot of your comments that we’re getting nice TAM expansion. You said Sims 4 had new and different audiences from your other games. And then, you said Apex Legends esports was up twofold audiences. I guess, my question is, do you think that one of the unintended consequences of COVID-19 is we’re going to get more gender diversity and a faster move out of sort of passive programming into sort of more interactive or more lean forward programming that you guys benefit from? And then, Blake for you, Andrew was just talking about these maybe more distributors pivot towards more distributed, you’ve been working on for the last five years. Could you talk through what the impact on the P&L would be over maybe in 2021, a little further out maybe than the COVID-disruptive period, and how much money that might save on the P&L, if we do move to a distributed talent base system? Thanks guys.

Yes. Let me grab the first one and then I’ll hand off to Blake. First and foremost, what we have tried to do as a company is build a broad and deep portfolio that speaks to and entertains a diverse global population. And you see that across our sports titles and Battlefield-like titles and Sims titles and Apex titles that give you different experiences across different platforms, across different business models, and different geographies. That has been at the very core of our strategy as Electronic Arts. What we are seeing through this period of time is, as more people come to recognize the true joy of interactive entertainment, a the true joy of gaming, even as I think linear media has also benefited through this time. I do believe that engagement will be more consistent in the interactive industry over time. I do believe we’re seeing new players come in who maybe hadn’t played before and who are experiencing the goodness that comes from connecting with friends in a truly interactive environment through games. We’re excited about that. We’re excited to deliver new and interesting and innovative and creative entertainment to fans. We’re very happy to see that the whole strategy of a broad and deep portfolio that speaks to and entertains a global diverse audience is answering the needs of the global community at this time.

Yes. Regarding expenses, it’s still too early to provide a definite outlook. For the next two quarters, including the current one, we will see significantly reduced travel and entertainment expenses. Events like Gamescom and E3 have been canceled, along with many other industry and internal events that usually bring people together. This will result in some savings. However, we don’t have a clear view of what the next year will look like. We will approach our operations differently and assess office staffing, which could potentially affect expenses negatively, although I hope that won’t be the case. Our aim is to have more people working from home, which could have a positive impact on expenses, but it's still early to determine. In the near term, we expect to see some savings, which we've factored into our guidance. We are currently developing plans for bringing staff back into offices gradually, rather than all at once, as many companies are doing. This year, we are likely in a better position with lower operational expenses since we are not hiring as much and spending less on travel, but there is uncertainty about what the following years will bring.

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

Two on M&A. Just curious if you’re I guess more interested in potential deals here, considering the current environment, or if you’re seeing more opportunities emerge to partner or acquire smaller game companies? Then second question, and obviously, the gaming business is already looking good compared to the traditional media business. So now, I guess, considering how you see your peers are performing, player engagement is strong, ability to continue to create content from home as you said is significant countercyclical to economic downturn. Do you think this could sort of, I guess, reshape the perception of your business from potentially larger media companies or otherwise, and that’s the catalyst for potential acquisitions over time?

Yes, Mike, it's difficult to predict. Currently, we are collaborating closely with various third-party companies for titles for this year and the next. We remain very attentive to them and are doing everything we can to support these companies during challenging times. At the same time, companies that currently have games in the market are performing well, similar to what you're observing with us and other public companies. I’m not sure if this will trigger mergers and acquisitions, but we believe that in the long term, it will highlight the importance of scale in this industry, which could lead to opportunities for M&A in the future. Our current strategy is straightforward: maintain close communication with all the companies we know. While it's more challenging without face-to-face meetings, we stay connected via phone or Zoom and provide support because we believe this will help us establish deeper partnerships over time. That’s all I can share for now, and we will see how things develop as time progresses.

And our next question comes from the line of Alexia Quadrani of JP Morgan.

Hi. This is Zilu Pan on for Alexia. Thanks for taking our question. We were just wondering if you can give us a sense of what you think spending might trend after stay-at-home orders get lifted. Any patterns you might be seeing in countries that have already eased restrictions? And then, just as a follow-up. Are there any concerns that the sports games might get a little stale without live sports events resuming in time for the fall releases? Thank you.

It’s premature for us to accurately evaluate where regulations have eased, as China is likely the only location where we’re beginning to observe this. Therefore, it’s still early. I wouldn’t expect any changes in our costs compared to historical levels. A key question will be whether we benefit from slower hiring and reduced travel in the upcoming quarters, and I believe we will, which is reflected in our guidance. However, I cannot predict if this will persist for another year or more, so it will take time for us to fully understand. Our priority, as both Andrew and I mentioned during the call, is to maintain our team. We are committed to preserving what we consider one of the best teams in the industry. Everyone is on the same page about doing everything possible to avoid spending reductions to ensure that. Regarding the sports calendar, we currently face two major uncertainties. Firstly, we need to consider the economic situation and how it evolves over time. Right now, our core audience is spending as they are home more, but that could change. Secondly, we have to assess the impact if the sports calendar does not resume on schedule. We know that sports fans are actively engaging with sports because of their passion for it. For them, the connection to sports doesn’t halt. The only avenue they currently have for sports engagement is through our games, which is a significant advantage for us. However, we lack precedent to understand the long-term implications if any sports seasons face further delays. We believe that everything we’re observing now, especially in esports, positions us as a major contributor to helping people socialize and engage in the sports they love. It’s important not to overlook the social aspect, as viewers typically do not watch a sports game in isolation; they enjoy it with friends who share their passion. Our role is to facilitate that interaction through our games and the viewing of esports online. We are hopeful that this sets the stage for a successful upcoming season, but we are navigating unprecedented times, which is why we are expressing some caution.

Yes, I would agree with Blake's caution, but I also want to highlight the incredible work our teams have accomplished in the past and have continued to do recently. We have a strong track record of producing outstanding sports content that isn't solely reliant on real-world sports. Our teams have developed initiatives like Ultimate Scream, Team of the Partial Season in FIFA, Zero Chill in Madden, and Ultimate Freeze in Madden Mobile. They maintain close relationships with the gaming communities, interacting with them daily and showing significant creativity and innovation in how they have created and delivered experiences for players in recent months. This has helped keep suppliers connected to the players, teams, leagues, and fans they enjoy. I genuinely believe there is an opportunity for us to keep providing for players even if actual sports are postponed or don’t return this year.

And the next question comes from the line of Alex Giaimo of Jefferies. Your line is open.

Thanks for taking the questions. I was hoping to just get a general update on your relationship with the NFL. We saw a competitor agree to publish non-simulated NFL games. So, I guess, the question is, do you think there’s any risk that the NFL opens up its simulated license at some point? And then, sticking to sports, sorry, I missed this earlier, but was there any update as to your plans with the NBA live franchise? Thanks.

Again, I would point to the year we just had with Madden NFL, the single biggest year in the franchise, a truly innovative developed game and an innovatively launched game in the context of how the team, development team came together and built new experiences targeting new and younger players in the context of NFL football and how our marketing team kind of launched those experiences in multiple launches and target those multiple groups of different players. The result is, the best year in Madden history. I would tell you, our relationship with the NFL was very, very strong. We look forward to building NFL games for many years to come. What you should expect from us over time is that we will continue to build out our NFL football offerings, both in the context of building on the Madden platform. Again, when you think about gamers, one of the most important things for them is a sense of community and being part of such a big community like the Madden community, whether they’re playing frontline 11 or 11 simulation football or they’re playing the fast knockout mode that we launched this year or whether they start to play some of the new modes we plan to deliver in the future on console, on PC, and on mobile. So, we’re excited about our football future and believe that it will continue to be a strong part of our portfolio and a really strong offering for football fans for many years to come. With respect to NBA Live, nothing more to announce at this, other than I would also tell you we have a great relationship with the NBA. We’ve been partners with them for a very long time. I’ve personally spent time with the NBA at the most senior levels, talking about innovative new ways to deliver new interactive content to NBA fans that maybe aren’t engaging in games today. We’ll have more to share on that in the coming months.

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

Blake, I wondered if you could deconstruct the performance of live services during the quarter, understanding that the Apex comp was difficult. What were some of the puts and takes on the 7% decline? And I apologize if I missed any commentary on Ultimate Team. And then, separately, can you just comment on your expectations for your mobile business to be up 1% in fiscal ‘21 against the market you’re forecasting to be up 7%? Thanks.

Sure, thanks for the good questions. The main factor affecting live services was primarily Apex Legends. We launched with tremendous success last February, leading to significant revenues. Since then, we've established a steady rhythm and have continued to grow quarter after quarter through different seasons, which has us feeling optimistic. Additionally, we decided to reschedule the FIFA Ultimate Team birthday event from late March to the first two weeks of April due to the lack of sports content globally. This is one of our major events each year and influenced our performance in Q4 compared to the same quarter last year. On a positive note, Madden's Ultimate Team has been performing exceptionally well, which is unusual for the February-March period following the Super Bowl. FIFA Online 4 in Korea has also shown strong performance. After discontinuing FIFA Online 3 in Korea, we saw considerable growth in FIFA Online 4. Ultimately, The Sims 4 continues to thrive, showing consistent growth each quarter thanks to a remarkable team and product engagement. In summary, Apex Legends had an incredible impact last year, and the shift in the FIFA event contributed to the quarter's results. On mobile, the way we’ve approached mobile for the year in terms of our guidance is we’ve basically assumed that mobile titles will stay in soft launch much longer than they have historically. We have relatively little new mobile growth from new products in the year. Our hope is that we can exceed that, but that’s how we’ve built our guidance because we know the mobile industry continues to get harder and harder. That means people are keeping mobile titles in soft launch for longer and longer to try to tune them. The good news is that we still have a strong set of mobile titles today that are highly profitable. You look at Star Wars: Galaxy of Heroes, for example, it continues to perform extremely well, things like SimCity continued to perform extremely well. While we’re not growing dramatically, we’re still extremely profitable across those titles. Our hope is the new titles that we have in the mix will get out of soft launch faster than we anticipate and possibly help us generate something above what we forecast for the year.

Our next question comes from the line of Andrew Uerkwitz of Oppenheimer. Your line is open.

One big picture question regarding the near-term is about the many new platforms we are launching on. Should we expect the release schedule between titles to lengthen, and will we dig into the catalog to find titles that could be revived or remastered? How does our broader platform strategy influence future game development? My second question is for Blake. Can you provide some insight into whether the sports titles have experienced any decline compared to other titles throughout April? How should we consider guidance moving forward in terms of your strategy with sports and non-sports titles? When do you think sports games will make a return?

Yes. Andrew, do you want to start with the first one?

Yes, absolutely. I would say, the strength of Electronic Arts is built on our ability to be platform agnostic. We’ve been able throughout our history to get to platforms with more titles of high quality than most everyone else in the industry. It is a position we’re very proud of and we continue to drive against that. Six or seven years ago, we anticipated that there would be many more new platforms we would have to build on over time and that ultimately cloud would also emerge as its own platform across a number of different companies or portals. Part of the reason we moved the organization to a single digital platform, single ID, single commerce, single data, single infrastructure, single security, and we moved the organization to a single engine in Frostbite was in anticipation of this. As these new platforms come online, we’re able to get to them more quickly and more efficiently and at higher quality than maybe our competitors can, who are working on multiple platforms and multiple engines, and we actually really use our scale to our advantage and our ability to do that. What you’re seeing from us now is our ability to get to console and next-gen consoles and PC, Steam and Stadia and mobile, and you should expect that we and Switch. You should expect that we will continue to look to deliver great content on any and all new platforms that we think have the ability to reach critical mass of gamers. In the context of overall time between games, I think it’s different by game. What we know to be true is that games are getting bigger and more complex in development, but they’re also entertaining significantly more players on each release basis and holding onto those players for much longer through ongoing engagement in large services and social interaction. As we think about our broader portfolio, you’ll continue to see us launch games on an annualized basis. Our sports games would be a good example there. You will continue to see us launch games on a multi-year basis; things like Battlefield or some of our titles out of Dragon Age would be a good example of that. You’ll see us think about games on a five- and six-year time horizon. The Sims, which launched the game over five years ago and continues to grow every year through extra content live services, would be an example of that. Then, you’ll see us launch true platform games, like Apex Legends, which we expect will continue to grow over the next decade. Again, I would come back to, I feel good about how we have moved the Company on a technology basis that puts us in a position to reach as many players as possible across geographies, platforms, business models, and genres, as this global playing audience continues to expand.

Yes. I’ll try to address the second part of your question. First, I want to remind everyone that we just completed a year where we raised our guidance three times and exceeded expectations each time. We recently provided guidance for the coming year during what is likely the most uncertain period we've ever faced. Still, we felt confident enough to project growth in both revenue and profit compared to last year. In the first quarter, we achieved the highest EPS in the company’s history at $0.31, and we have now indicated $0.70 for this upcoming quarter. While it's possible that business conditions could change drastically, I believe everyone understands that Andrew, our team, and I have been very cautious in our approach. Keep this in mind as you look ahead to the year.

So, with that, we will end the call. I appreciate everyone. Most importantly, please ensure your families are healthy, spend time with them, and take care of yourselves because we need you all to help us in the marketplace. Thank you.

Be well, stay healthy, stay safe. Thank you.

And this concludes today’s conference call. You may now disconnect.