EA aims to mask active user numbers in investor earnings reports

Wouldn't want investors getting *too* much information to base their decisions on, after all

    
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Don’t call it hiding anything, just call it select data provisioning! Electronic Arts COO and CFO Blake Jorgensen has said that future earnings reports from the company will be excluding daily and monthly active user numbers from the company’s earnings reports in the interest of providing data that investors care about.

The move was mentioned during a quarterly investor Q&A, and was explained by Jorgensen as a move to cull “metrics that don’t make sense” for investors. “We’re not necessarily trying to hold back any information, we’re not signaling anything. We just realized that we want to make sure you’re not doing something with numbers that don’t make sense,” says Jorgensen.

The move is similar to one made by Microsoft in September of last year, which argued that MAUs will only have “greater volatility […] going forward as new content and services are introduced” by the company and that the metric provides an incomplete picture of a platform’s performance. It’s also a similar rationale to the one given by Activision-Blizzard when it switched from reporting subscriptions to the heavily obfuscated studio-wide MAUs.

source: Gamasutra
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memitim

Makes sense tbh, I don’t care what EA’s user numbers are and the investors don’t care how many people are playing Apex Legends for free, they just want to know who dem whales are!

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KodaiRyu

Sadly with Steam releases they can’t hide anything because of Steam Statistics.

semugh
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semugh

who? EA? They don’t do steam for years now.

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KodaiRyu
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rafael12104

Yup. This was released on Origin as well. I was surprised to see it on Steam.

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dreamer

EA made a big show about returning to Steam last year. Presumably that will continue in 2020.

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rafael12104

True, or at least partially true because some games release through multiple store fronts now.

But EA is pushing everything through Origin now. And I haven’t seen anything that details monthly active user details on Origin.

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rafael12104

Hmm. I smell an opportunity for a good law firm representing shareholders and investors.

Damn it. I should have been a lawyer.

Yes, I’m insinuating I would sue their ass off. Lol. I might not win, but I’ll get some new clients. Heh.

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Armsbend

they get the final say how everything is presented – as long as it is truthful and there is no deception. Shareholder lawsuits generally spring out from deception – and class action calls come out literally every day.

tl;dr EA can legally do this. Like the article said – they aren’t the first. Even Apple did it about a year ago when discussing units sold. They got hit in the near term but since that time they have been destroying everything in their path.

It can be looked like this: some company use MAUs DAUs or sub counts to inflate their stock price. When they decide they want to switch to a different metric they can – but they will be punished for it. The most loved stocks on the market are generally the most transparent. Stock price is only determined by two things: supply and demand.

A classic example would be Netflix. Netflix’s SP has grown exponentially over the years as everyone knows. They did that by generating excitement on sub counts. If they all of a sudden decided to not report those counts then the question would arise if the massive valuation given for those counts is justified. Same thing here on a much smaller scale.

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rafael12104

But there is GAAP (genreally accepted accounting principles), right? And those principles are largely cover what is counted and how things are counted in financial statements. SEC has purview over those principles and while the SEC is slow to step in, they do and enforce accounting regulations.

Wouldn’t this allow John Q Public an avenue to sue if statements are omitting key pieces of information?

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Armsbend

Absolutely. But reporting users isn’t part of gaap – except for profits and loss.

The users absolutely must be counted as they pertain to revenue, costs, etc.

But on the call saying? we have 100M MAUs vs last years 90M MAUs – not a requirement. It just raises questions – like it is here now.

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rafael12104

I see. Thanks for the clarification.

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Arktouros

Yea as predicted just like in the current MMO market, the GaaS or “Live Service” model is going to run into the same problem that players only have so much time in their day. There is no time to play an infinite number of new live service games that they want to produce in order to milk that Microtransaction money. The numbers are going to decline as people settle around and transition between them.

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Sorenthaz

Yeah pretty much. Oversaturation greatly reduced the amount of MMOs coming out, and the “live service” model will eventually hit that same bottleneck. Mobile market hit that too sort of, but mobile games are mostly targeted at hooking in whales.

K38FishTacos
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K38FishTacos

If I think about quality in gaming, I can also think about it in “food.” Look at brands like McDonald’s and Coca-Cola. What they offer the public is horrible (on many levels) in quality, but people love these brands and buy their products no matter what — worldwide. EA and Activision are gaming’s equivalents of these companies. In fact, Kotick sits on the board of Coca-Cola.

The masses will accept garbage into their bodies and minds (via gaming and entertainment) and companies that produce these things will prosper. Some companies rise and fall, but that is a matter of their management in the competition between them.

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Lily Cheng

Your food analogy would make sense if EA and Activision games were also sold at garbage prices, but they aren’t, they are full priced games just like all the other high quality food you are trying to compare it to.

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Danny Smith

“nothing to see hear, we are just hiding statistics to benefit you”.

I feel like stuff like this “surprise mechanics” and “we will do better in future” are a strange form of self hypnosis from these people. Like if they repeat the mantras enough they will believe it and then somehow things will all work out. Its reaching bizarre levels nowadays.

Alyn
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Alyn

How is this company still able to make so much money? Welp, because people are gullible, I suppose. Or they just don’t care that the company is corrupt and ripping them off.

Who knows. Humans can be so strange.

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Armsbend

Because of the soccer game.

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Schmidt.Capela

Or, more specifically, because of the lootboxes in the soccer game.

Which is why EA is willing to stretch the truth to the breaking point in order to defend lootboxes. Losing those would likely cost them hundreds of millions of dollars in annual revenue.

oldandgrumpy
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oldandgrumpy

Making all your money out of 100’s of whales might make your investors nervous and regulators interested.

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Java Jawa

seriously. . . business decisions are based on data and they are holding that back. . .

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Armsbend

By the by – as a close follower of stocks – this hardly ever confuses analysts or the market; and they do not like it. They punish the stocks in the near term. EA was punished accordingly for this as everyone knows now that the NA is in an ever-increasing steep decline.

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Arnold Hendrick

Good! EA (Electronic Arts – not to be confused with Steam “Early Access”) deserves stock price punishment whenever they hide data from investors. After all, the data being hidden is never good news.

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Anstalt

I wasn’t aware that they released numbers anyway?

I remember back in 2012 EA specifically stopped reporting SWTORs numbers because they dropped so quickly.