EA Speaks Out on Xbox and PlayStation Upgrades

During its fourth quarter of 2015 earnings call – available in both audio and transcript form – Electronic Arts’ Chief Financial Officer chimed in on all-but-confirmed rumours that both Microsoft and Sony are looking to upgrade their current generation consoles, the Xbox One and the PlayStation 4, respectively.

During the call, EA CFO Blake Jorgensen threw his support behind backwards compatibility – a strategy favoured by Microsoft with its Xbox 360 Backwards Compatibility program for the Xbox One – and that the company is in a good position to deal with any hardware changes due to its exclusive use of the Frostbite game engine.

“In terms of any mid-cycle upgrades, once again I can’t predict,” Jorgensen said. “But what I can tell you is that what was heard I think publicly from the console makers is they’re realizing that the compatibility issue across consoles is an important consumer issue.”

“And as Microsoft has shown,” he added, “they’ve tried to do with some backward compatibility on to older titles and new titles. I think that’s going to be an important part of what a mid-cycle might look like if there is one, which removes a lot of the risk associated with what we’ve seen historically with console cycles.”

“We don’t spend a lot of time worrying about it, because we feel like our ability to develop for whatever new technology comes, the risk of that’s been minimized because we’ve moved towards one single engine, Frostbite. And we’re able to port that to whatever platform or point that to whatever platform is evolving or is upgraded.”

Either way, though, Jorgensen says that EA is in a strong position to deal with any changes in console strategy, given its portfolio is as diverse as it has ever been.

“In addition, our business model is so much more diverse now than it has been historically, that the notion of a console cycle becomes somewhat irrelevant in our ability to generate strong earnings and cash flow,” he said. “So we’ll all be interested to see where Microsoft and Sony come out if they do something at E3 or sometime in the year to come, but we’re excited about the continued growth in the business and not afraid of a cycle change if that was to occur.”