Electronic Arts' (NASDAQ:EA) recent deal with the NFL was labeled as "the biggest and widest-reaching gaming agreement in NFL history." EA and the NFL have been partners going back to the early days of the Madden franchise in the 1990s. This new agreement will see one of EA's biggest titles expand to new genres and platforms.
One of these growth avenues will be new offerings for mobile players. EA's mobile business saw tremendous growth in the early part of the last decade, but over the last few years, it's been sliding.
That mobile business still has potential. Rachel Hoagland, the NFL Vice President of gaming, esports, and partnerships, revealed to NFL.com that the league has interest in a mobile game for Madden that is similar to SuperCell's Clash of Clans, a popular mobile strategy game that made $22 million in the month of May alone, according to Sensor Tower. Here's what this could mean for EA's mobile future.
The history of EA's mobile business
In the early innings of the mobile gaming market around 2010, EA went on a buying spree, acquiring several small studios to build a diversified lineup of games for the burgeoning category -- currently the fastest-growing and largest segment of the $150 billion video game industry.
EA acquired Playfish, a developer of free-to-play social games, in 2009 for $308 million. Over the next few years, it acquired others, such as Chillingo and PopCap Games, the maker of the smash hit Plants vs. Zombies.
Mobile net bookings soared to a peak of $659 million in fiscal 2018, but aging titles have weighed on the segment over the last few years. In fiscal 2020, EA's mobile net bookings fell to $516 million, excluding licensing revenue.
The NFL has big plans for Madden
In the most recent quarter, EA credited its sports titles in Asia for driving a 2% bump in mobile net bookings. EA offers Madden Mobile, but it hasn't been enough to move the needle.
Football games on mobile have more potential. Interest in the NFL has been on the rise with TV ratings showing improvement over the last few years and more people than ever playing the premium version of Madden on console and PC.
The NFL sees the digital distribution of games as an important trend that is creating greater demand for games beyond console titles, as Hoagland told NFL.com. This is why the NFL is interested in expanding to new offerings on mobile with the Madden franchise.
A Madden mobile game similar to Clash of Clans would not be too unfamiliar to people who play Madden Ultimate Team on console. In Clans, players build a village and a small army to compete in Clan wars. The game is free-to-play, so it makes money from in-app purchases like many other mobile games.
Madden already follows a similar model with Ultimate Team, where players purchase digital player cards to put together a fantasy team to compete with others online. Live services are the bread and butter of EA's business, where Ultimate Team made up 27% of EA's revenue in fiscal 2020.
Since the new agreement between the NFL and EA calls for gaming experiences across "new genres," that does leave the door open for a strategy football game along the lines of a Clash of Clans.
As Hoagland told NFL.com, 75% of NFL fans play video games, so there is already a large built-in audience for Madden. As mobile devices become more advanced, especially with the era of 5G connection speeds upon us, the mobile market will only continue to grow like wildfire. EA has a great opportunity under this new agreement to create a football game for mobile devices that could attract console-only players.
EA expects mobile net bookings to increase 1% in fiscal 2021 to reach $721 million, which includes licensing revenue. If EA can create engaging new experiences out of its new deal with the NFL, its mobile business could get a much-needed boost over the next decade.