Electronic Arts, Inc. (NASDAQ:EA) Goldman Sachs Communacopia + Technology Conference September 13, 2022 6:45 PM ET
Company Participants
Andrew Wilson – Chairman & CEO
Conference Call Participants
Eric Sheridan – Goldman Sachs Group
Eric Sheridan
Okay. We are on to our next fireside chat and it’s my pleasure to host Andrew Wilson, CEO of Electronic Arts. Andrew, thanks for being here. It’s great to see you.
Andrew Wilson
Thanks for having me. I have the dreaded afternoon slot.
Eric Sheridan
No, not at all. And I’m really this conversation because I think in prep up for the conference, I really wanted to catch up on what the industry has been through over the last couple of years and how the sort of industry is in a transformation to sort of what it might turn into in the years ahead.
Question-and-Answer Session
Q – Eric Sheridan
So I think taking a step back during the pandemic, I think a lot of the long-term secular tailwinds were on display in the industry. What did you learn about the industry through the pandemic that now we’re informing how you’re thinking about the broader landscape going forward?
Andrew Wilson
I think there were two fundamental secular trends that were really ratified and amplified during the pandemic. The first is that social interaction moving from physical to digital. We’d have a choice during the pandemic. It was the only way we can connect for the most part, as many of us were locked in our homes in certain countries like the one I’m from you wouldn’t like to leave your home. So digital is the only option. So that secular trend was pretty strong going in, and it was both ratified and amplified.
The second thing is that the consumption of sport, entertainment and media was moving from linear to interactive. And we saw that go into the pandemic and certainly, in a world where there was no sport being played for a big portion of that, and we had a lot of shutdowns of production of new linear content. Our industry really provided both sports and media and entertainment across the board, and we saw the uptick in that dramatically during the pandemic.
And so as an industry, we kind of sit at the very intersection of those 2 things, social interaction and the consumption of sports, media and entertainment. And so for us, the big learning was these things that we’ve been building towards for some number of years but really leaned into the interactive consumption of entertainment and media broadly and really leaning into the interactive nature of this thing that we do was really, really powerful.
And it’s meant that while many other forms of media have actually really dropped off post pandemic, we haven’t. Our engagement continues to grow because people woke up and discovered that, hey, not only is this an extraordinary form of entertainment in a world where entertainment is a fundamental human need, but this is an incredible way to stay connect with friends and families regardless of whether you see them in person or not.
Eric Sheridan
So I want to take that as a jumping off point because obviously, you operate inside the gaming industry today. But increasingly, as you pointed out, some of the venn diagram of what’s a media company or an entertainment company, some of those lines are starting to blur. So when you think about operating your company against the broader landscape, how do you think about the transformation of media choices and entertainment choices and how it feedback into ways in which you want to set up the company up over the next couple of years?
Andrew Wilson
Yes, great question. If you think about this on kind of a 5- to 10-year time horizon, and you really look at Gen Z and Gen Alpha in terms of populations that by 2030 is going to represent probably 45% of the workforce, there will be 4 billion people strong. We’ve got to build for that audience.
Now it’s kind of a short hand. The reality is if you look at Gen Z and Gen Alpha today and even millennials before them, there’s been a real evolution in how they consume media. First, they consume more sport and entertainment media than any other generation before them by a fairly wide margin. It kind of permeates every aspect of the life — of their life.
Two, though is they are in more control of that consumption than any generation before them, and they want to contribute to that consumption more than any generation before them. So as we think about what we’re going to do on a 5- to 10-year time horizon, and we really think about the expansion of the definition of games. And we’re at this kind of inflection point.
In our industry, we’ve gone through a series of inflection points over certainly our 40-year history as a company. We went from single player to multiplayer. We went from standard depth to high depth, which increased immersion again. We went from off-line to online. All of these things that — we went from units sold and minutes engaged. There’s been these fundamental inflection points. It’s changed the way we build games and changed the way games are played and ultimately change the definition of games more broadly.
We’re at one of those inflection points, again, where we’re seeing the expansion of the definition of games across 4 key vectors, the first is the very core vector, which has player’s notion of interactivity. And what we’re now seeing is that players are asking us to deliver more in the context of play. So what happens in our football franchise when you’re not kicking a ball? What happens when you leave the stadium? What happens the need for speed when you get out of the car? What happens in Apex Legends when you put the weapon down you go and build something or you explore. What happens in the Sims where you leave your home and go to someone else’s home and this expansion of the modality of play and what I can do in the world.
The second thing, of course, is once you start to do other things in the world beyond the core concept of the game, now it’s how can I create in that world. And in the near term, creation is just moving around assets inside of the world to make it a more personalized experience. In the medium term, of course, what we’re starting to see is the creation of new assets to put in the world that we create. And then on a 5- to 10-year time horizon, what we expect to see, we’ve started to see this today is that there will be creation of new world that will sit right next to the worlds that we create and people will move frictionlessly between those 2 things.
And so this notion of create is representing an extraordinary new element of our industry. And if you look at it on balance, about 20% of our players are creators, about 10% of our players are creating content that the community is engaging with, but well over 50% of our communities engaged with created content. And in our world and in our industry, as we look at our franchises, minutes engaged, the money spent correlates almost on a one-to-one basis. So whether we create the content or our community creates the content provided its high-quality content, provided its engaging, it represents an extraordinary opportunity for us. And you’ll see us do more and more of that.
The third vector, of course, is watch. And if you look at a franchise like Apex Legends, I think we had about 3 billion hours of Apex Legends played last year. We had nearly 2 billion hours watched. If you look at our FIFA franchise, I think we had nearly 4 billion hours played and well over 2 billion hours watched. And so this watch component is becoming a very big part of what we do, but it’s not just in the context of the game itself. It’s watching the context of content around the game.
And you will have seen we did a deal with La Liga recently, where we’ll start to bring content from the real world of football into this platform that we have that will be EA SPORTS FC that we build around play, create and now watch. And let’s watch what goes on in the game, what goes on outside the game and watch things that are adjacent and important to the community who are interacting this experience.
And then the fourth vector of course is social connection. And I read recently that someone said we know I was very happy to hear, games are the new social networks. But in social networks in a very different way than a traditional social network. So what the traditional social networks told us was, yes, in order to be cool, you need 1 million friends. As it turned out, having 1 million friends isn’t always the best thing. Good things don’t always come from needing to have 1 million friends.
Now what we love is humans is to be part of a big global community. We love to go to a football match, with 100,000 people in it. We’d love to go to a theme park with 100,000 people in it. We love to watch a movie and know that on opening weekend there’s millions of people to watch this movie. But the most important thing to us and these little atomic units we have, the 4 people we watch football with on a Friday night on our couch. Four people, we invite over for Sunday brunch before Sunday Football. So there’s this thing as we think about the future of connection.
It is, yes, we’re building global communities around our content across play, watch, create. But connect for us isn’t just about how do we immerse you in this global community? It’s how do we allow you to build deeper connections with the people that you — that are most special to you. And as we map that out over the course of someone’s life, these are the most important relationships that people have and these are the most important relationships we can reinforce for our players, and that’s why people stay in our games even after there are these accelerators and amplifiers like a pandemic.
And so as we build out our future, you should expect that we will have a focus on these global communities across our biggest franchise, FC, Madden, Apex, Battlefield, The Sims, our new skate franchise. And that all of the rest of the depth in the breadth of our portfolio will be built around supporting these global online communities that are built across play, create, watch, connect.
Eric Sheridan
That’s super interesting in terms of the way you laid out the framework there. When you think about what EA does well today against that shifting landscape in that direction and you think about where you might need to invest to reposition EA for the future, how should we be thinking about some of this being execution within your existing core competencies versus areas where we should be watching for new and interesting avenues of investments that you want to make?
Andrew Wilson
Yes. Great question. I think we have one of the deepest and broadest and most important portfolios in all of entertainment and that’s only becoming more valuable over time. Two, I think we have the most incredible teams in all of entertainment, who have been able to deliver extraordinary new experiences for our player base that’s over $600 million and growing still.
And in a world where many have tried to do just that build these shared experiences inside 3-dimensional worlds, where the biggest tech companies, the biggest entertainment companies and the biggest social networks have tried to do this and as yet have not had success, and we don’t want to be overconfident or arrogant in our ability to do this thing. What we do is very particular and very special, and we’ve demonstrated the ability to do it at scale across franchises, across geographies, across platforms, across business models, across many decades. And that’s a pretty powerful place for us to find ourselves in, in a world where the future of entertainment is interactive.
But we’re always looking to build new IP inside of our ecosystem. And building new IP in any form of entertainment, whether it’s books, music, television, movies or games is always problematic. I think we have some very exciting teams who have joined us recently through the pandemic as our industry dealt with a lot of really tough stuff. The strength of our culture really attracted some incredible talent from across the industry.
And so we’ve got some great new IP coming down the pipe, and I feel really good about that. I do think you’ll see us lean more into creation. And while the Sims has been built on creation since it launched in 2001, and we’ve seen elements of creation inside our Battlefield franchise with only in Battlefield moments and we see FIFA expanding with — through the creation and collection and Ultimate Team, we’re going to do more of that. We’re going to open this up and really lean into this component and part of what you’re seeing with us in Skate is the ability to build this overall global universe with skateboarding is a cultural catalyst, but not really the sum total but nature of experiences you will have inside of that world.
And just like the real world where skateboarding leans into fashion and music and automotive and building and brands, we think that franchise can do that as well. And so you’ll see us lean more into really engaging and investing in creation. I do think there are elements of watch that you’ll see us invest in. And so the new deal we do with La Liga again, we’re not going to go out and buy giant broadcast rights. I don’t think we’re going to stop making movies. But I do think there’s a way for us to really think about in a world where we have 600 million or 1 billion players engaging with us for 1.5 hour a day.
What could we offer them that would get 10 more minutes, 15 more minutes? We tried it with Premier League inside of FIFA a couple of years ago and the engagement was off the chart. So as we think about that across our sports businesses, as we think about that across our owned IP or our licensed IP business, what are those things that we can bring into this ecosystem and really use our games and these global online communities as platforms for engagement.
And then lastly, as we think about social connection, I think you’ll see us invest more there. What we have today is strong engagement within the bounds of a video game. They’re spending 1.5 hours a day playing games and connecting with their friends. And then what happens? They log off and they all separate and they go to some other platform and they talk about the fun they just had 1.5 hours playing our games.
And when I think about how we drive social interaction, what I’m challenging our teams are now is what happens with social interaction beyond the traditional down to the video game. If we think about these games as platforms, as we think about these communities as connected, how do we ensure they never have to disconnect, how is the interaction they have within a game, the interaction they have outside of the game seamless. Once you have 1 billion people engaging in-game and out of game and you’re getting 2, 3 hours a day, we think that unlocks tremendous opportunity for us on a 10-year time horizon.
Eric Sheridan
Got it. Okay. There’s a lot of things you mentioned there that sort of talk to possibly shifting habits from the next wave of computing we might see. We had a desktop wave, a mobile wave. Some people talk about it as Webb 3. Some people talk about as a creator economy. Other people talk at the metaverse. What do you see as elements of what you do well and how it might evolve against some of these definitional terms that are now getting sort of thrown out from what either the next wave of computing or the next wave of entertainment might look like?
Andrew Wilson
Yes. I think there’s a lot of goods out there. They meet a lot of different things to a lot of people. And anyone who’s read the books on the metaverse will know that not everything in the metaverse turned out exactly as we would want it to. And so as we think about this, we really — if you break it right down and you go all the way out to this thing that we’re calling metaverse, what the metaverse really is, is a 3-dimensional social space for shared experiences with a global community of other like-minded people. And those experiences might be education. Those experiences might be exploration. Those experiences might be corporate enterprise. But we believe that as a foundation, entertainment is a killer app in that world.
We’ve got an audience who choose gaming as their first form of entertainment. We’ve got an audience that will represent 4 billion people by 2030 and 45% of the workforce and have tremendous buying power. And we’ve got an audience that today spend 1.5 hours with us in our 3-dimensional world in shared experiences with their friends. So as we build this out, we really do think about it as — for us, it’s really just focusing on the thing we’ve been doing for the last 40 years, which is building this extraordinary world, filling them with extraordinary characters, telling extraordinary stories with one evolution or maybe it’s a revolution, which is how do we allow our characters to come in, how do we expand the modalities of play for them, how do we let them create new experiences inside that world, how do we really build across watch and how do we make sure connection is at the very center of what we do.
And for us, focusing on simply what we have done for the last 40 years and really doing that in line with Gen Z and Gen Alpha puts us in a very strong position, whether it’s Webb 3 or the metaverse or however you want to describe it. And ultimately, whether we think about that in the context of collectibility in the blockchain or whether we think about that as broader commercial enterprise that’s transferable, we think we’re really well positioned.
Eric Sheridan
Okay. I want to talk about your existing business today and how you can leverage some of the assets you have against this broader vision. First, you’ve talked a lot so far in the first 15 minutes or so about your players, the people who play your game, who are engaged every day and the levels of engagement they have. Talk a little bit more about what you think you can do with the player network you have today and how your own engagement as a company into that player network might evolve?
Andrew Wilson
Yes. Our focus right now is how do we truly develop these global online communities around these core franchises that we have and how do we launch more of those franchises that represent greater global communities, but the real power of that network over the course of time is really how much time they spend with us.
As I said before, in our world, engagement to spend has almost a 1:1 correlation. And so time spent in our network and in the games that make up our network represents extraordinary returns over the course of time. I think that as we think about new modalities of play, add create, add watch to that we get to a place where if you have 1 billion people strong inside your network and they’re engaging with you on average 1.5 hours to 2 hours a day and they have deep connections with 4, 5 or 6 people and this leads into the ability to move beyond entertainment over the course of time, that represents an extraordinary opportunity.
What I’m trying to do with our organization is not get too far out there just because there’s a lot of people talking about a lot of different things, but really focus on the things that we do very best, which is build great IP, deliver that in the form of extraordinary interactive experiences and engage global communities at scale. If we get that right then we’re really well positioned for the future and the unlock for us is exponential.
Eric Sheridan
So maybe following up on what you said just there at the core, if you have compelling IP, time follows and monetization follows time. How do you feel about the current state of the IP inside the business today? Maybe walk us through some of what you felt have been some of the critical decisions you’ve made that have put you where you are now from an IP scale? And how should we be thinking about you investing behind IP, both existing IP and new IP in the years ahead?
Andrew Wilson
I mean if you think about our biggest franchises, big decision made this year, of course, was the move from FIFA for the EA SPORTS FC. That may be one of the most exciting decisions we have ever made as a company. And that’s not to describe the relationship that we’ve had with FIFA for the last 30 years. I think the franchise has delivered over $20 billion in revenue over the course of that relationship. So it’s been an extraordinary relationship.
And for the longest time, the nature of global football was very aligned with the nature of FIFA. I think global football has grown so dramatically over the last 5 or 10 years. And what it means to players has grown so dramatically over the last 5 or 10 years and how they live out those experiences inside the game that we make has grown dramatically over the last 5 or 10 years.
And so as I think about the future, the ability to own and control our biggest franchise is an unbelievably powerful opportunity for us, and it does allow us to align much more closely with our league partners and our cloud partners, but more importantly, with our players. This is as much their game as it is our game. And so as I think about the unlock that we have to build more mode out of play that we might not have been able to build before to work with more commercial partners that we might not have been able to work with before.
Again, Nike has been almost absent from our game by virtue of the FIFA or Adidas relationship, which again was wonderful. But just think about the power of Nike as a brand in the context of sport and in particular their growing power in the context of global football. And the opportunity to work with people like Nike and other relevant brands around the world, we think, represents extraordinary opportunity for us and deliver experiences and content in vanity items that our players want to engage with, but they’ve never had access to.
And when you think about the ability to expand beyond what happens in the stadium and go more deeply into the world of global football and actually own football fandom globally, this is an extraordinary opportunity, but a big thing is we’re going to be able to move so much faster than we ever could given that this is a brand that we now own. So we’ve got this extraordinary opportunity with FC.
You’ve got Apex Legends, which we start at what is just was a few years ago, not even 3 years ago, and has generated, I think, over $2 billion of revenue. I mean we’re just getting started. There’s a global community of 150 million players. What’s really interesting to me is not only is it really powerful in the U.S. and really powerful in Europe, but we’ve unlocked the market in Japan that we’ve never had access to and we’re starting to see exposure in Southeast Asia that we just haven’t had any strength in our franchise with other than FIFA. And what we’re starting to see in China is it’s actually got a lot of pickup in China as well.
And so Apex Legends represents an extraordinary opportunity for us. We’ve just launched mobile. We’re just getting started. This is a decade-long opportunity for us. When we think about Battlefield. I think Battlefield is one of the great first-person shooter franchises. It was built on creation. And if this thing if you have to go to YouTube and look up only in Battlefield moments, you see that people are being creating these incredible things inside of the Battlefield franchise for the longest time, has well over 50 million players.
I don’t think we delivered in the last 2 iterations of that in the way that we should have. There’s a lot of work that we’ve got to do there. But at its very core, this extraordinary IP. And what we’ve seen in the world of entertainment is great IP is resilient. And we’ve seen movies not live up to the expectations of franchises. Star Wars might be one such franchise. And then you can see what happens when you get the right creative team involved, how they can completely reinvent and grow a franchise. And I think we have an extraordinary creative team involved in Battlefield now who have unbelievable ambitions to own the first puts and shoot space, particularly as it feels to creation.
And in a world where there may be questions over the future of Call of Duty and what platforms that might be on or might not be on, being platform agnostic and completely cross-platform with Battlefield, I think is a tremendous opportunity. I could keep going. The Sims, which is unchallenged in a category of female gamers built on creation since 2001 where we have well over 100 million people engaging in that.
If you think about the opportunity of Skate, which is basically building an open-world action game using skateboarding as a cultural catalyst to launch into every aspect of Gen Z and Gen Alpha and then the other things that we’ve got coming down the pipe. So as I think about our franchise, I literally had franchise reviews this week. I spent all day yesterday looking at everything coming down. And I spent a lot of time in spreadsheets and looking at my investor app and looking at what’s going on in the market today, which wasn’t — didn’t bring me great joy as it turns out. But I come out of a day like yesterday, where I’ve spent the day with our creative people I think — and I remember why I spent 22 years with this company.
Eric Sheridan
I do want to maybe tilt a little bit towards macro, but I’m going to ask it a little bit differently. One of the debates we find still with investors is, as the macroeconomic environment remains volatile, do you think of your company and the category it exists in as recession-proof, recession resilient? There’s elements of like how it would act if the consumer did go in a recession, which is not yet from all the things we can see and the work we do. And then when you are operating in such a volatile environment, what are some of the opportunities and challenges when you think about aligning growth investments against the longer-term narratives?
Andrew Wilson
Yes, great question. Again, we come at this from a fairly fundamental position, which is entertainment is a fundamental human need. It has been essential to our lives since the beginning of time. We all do this thing that we do every day and then we go home and we entertain ourselves somehow. And so as a species, we will never give that up no matter what’s going on in the macro environment.
And then you say, okay, so we know entertainment is a fundamental human need. What is the first choice of entertainment? Well, interactive now was the first choice of entertainment. It’s been the fastest-growing entertainment category for as long as I’ve been in this business and it shows no signs of abating. In fact, what we just talked about is the expansion of the interactive entertainment space.
And so — and how much more important in that space is to the growing generations of consumers that are coming up. And so then you say, okay, so what else might impact it? Well, then it’s about value. And if you think about money spent versus hours engaged, what we do represent probably the best value entertainment by none. It’s better than watching a movie. It’s better than a Netflix subscription as it turns out. If you think about money spent versus hours engaged, and so we think that continues to present a really strong opportunity for us and it’s why our industry on balance has been very resilient even in past macroeconomic challenge times.
I guess the big question that some have had from the — is well, what happened in live services? In a world where people can play and not spend and get real value, again, I would say the live service expense that people take on is incredible value. I mean in the old world, we used to buy 5, 6, 7 games a year at $60 a pop. So we’re in this thing $300, $400. Today, as a player, I can buy FIFA for $6 upfront. And on average, I spend $50 to $100 in a live service. So I’m at $150, $100 and I get 365 days of football entertainment and connection of the sport I love and the friends I love enjoying it with. And so even in the middle of live services, it represents extraordinary — better value opportunity for consumers.
But to the extent that consumers decided that, hey, listen, things are really tight and maybe I’m not going to do as much. The way we think about it is engagement is enduring. And as we invest to continue to drive engagement through this cycle, we know that at some point, we will come out the other side. So as we think about it, we do think about it as through cycle investment. We think about how do we invest in the things that are going to drive engagement in the near term and drive long-term value over the course of time. And you’ll see us move and adjust base on this.
Right now, our engagement is up year-over-year. So offer incredible pandemic engagement comp were up winning strong growth in our business. It remains to be seen how that plays out over the course of the year if this thing that we all fear truly does, in fact, happen. But as I look at our foundation, I come back to human entertainment — entertainment is a fundamental human need. We are the first choice of entertainment for the biggest generations. We represent extraordinary value. And even in a world where there was a blip, we will continue to drive engagement. So as we move through this phase we’ll come out stronger than we went in.
Eric Sheridan
Understood. Over the last couple of years, you’ve allocated a fair bit of capital towards adding to your mix of mobile in your business through acquisitions. I want to ask a couple of questions on mobile. But first, maybe just talk us through some of the assets you did acquire and how you feel about those assets today and your positioning as more and more computing goes into mobile and more and more gaming goes into mobile as well?
Andrew Wilson
Yes. I mean the thesis is pretty sound. Mobile is the single biggest gaming platform on the planet by a wide margin. It is unchallenged on that front in terms of people utilizing that platform for gaming. And so that’s just a space that we have to build strength in. The second part of that thesis for us, as we look at the mobile category, we are seeing improved compute. We are seeing improved graphics. We are seeing mobile form part of an overall gaming ecosystem, and we’re seeing brands and immersive worlds and global communities come together — these things that we’ve been building for 40 years is now, for the first time, really coming together in a meaningful way in mobile.
And so as we looked at our business, we had these extraordinary brands, we had some really solid mobile teams. Remember, Star Wars: Galaxy of Heroes tremendous game. Our Sims franchise continues to do well. FIFA is now growing faster than it’s ever grown. Our Madden franchise has been #1, #2 in the app charts multiple seasons over the course of time.
So we had a great core mobile business, very profitable unlike many of our competitors who went in and invested beyond the capacity of the platform wound up upside down. We never did. We invested profitably all the way along and built a really solid and growing mobile business, but we knew that we were going to need some things. We knew that we’re going to need talent. And talent in our business is the most important thing in our business. We are a talent-driven business.
And so we have an opportunity to go out and bring in extraordinary talent into our business. And with talent comes not just the ability to do things on a go-forward basis, but it comes with deep experience and deep learning about what they’ve done already and infuse our business with that. We also wanted technology. There is ad technology that we just didn’t have in our business that we’ve gotten as part of those. And there is live service management technology and mobile platforms that we just didn’t have that we now have.
And then the third thing is we’ve got some incredible IP. We’ve got some incredible sports IP that bolstered our sports platform. We have more sports coverage as a company than any other entity on the planet by a fairly wide margin. We’ve got this developing lifestyle business with The Sims and Covet Fashion and Design Home. And so we just looked at these things, and there was just this complementary nature of what we are doing with that and Golf Clash in these things to build out. And these businesses, when you build them at scale, they kind of have their ebbs and flows, but they have extraordinary long tails.
What we’ve seen in mobile is where you can build a scale mobile business. They’re extraordinary long tails that when you build into that level and you build them over the course of time, you have tremendous margin accretion even if you have margin compression in the near term. And so we’re really excited about that. And as we start to do more in FIFA, we do more in Apex, we do more in Battlefield, and we do more across our franchise and escape launches as a complete cross-platform open world experience across devices, I think mobile will continue to be a really important part of our business because it still represents an ability to get to the biggest TAM on the planet.
Eric Sheridan
Okay. Two more topics I wanted to talk about before we run out of time. One would be, you’ve talked a lot today about ambition and opportunity and some of the growth for the long term. How do you strike the right balance between investing against that growth and delivering on margin and returns and some of the things that investors want to see where there could be a balance between investments made for growth and returns that amplify equity holders’ returns in the stock? How do you strike that right balance?
Andrew Wilson
Yes. I think it takes discipline. And what you’ve seen from us is extraordinary discipline over the course of time. And what you’ve seen is real strength in our business, and we’re always managing top line growth and bottom line growth and optimization of the organization in the middle, and you should expect to continue to see that. I think we came into this year, we’ll probably go into next year investing for the future because we think there was an opportunity in a world where, as I said, these big tech companies, these big entertainment companies and these big social networks are pulling back from gaming at a time where the rising generation are choosing gaming first before any other form of entertainment. We’re in a very particular and very special position.
And we have the ability right now because of the strength of our to attract amazing creative talent, maybe more so than in my history of the company. And so when I look at that, I think there’s an opportunity for us to invest this year and next in the development of our pipeline and the development of the underlying foundation to strive towards really building these robust global communities, but just now, we’ll be very disciplined.
I’m not going to go out and buy a movie studio just because I think there will be a convergence between linear and interactive. I think there are different ways that we can do that. I’m not going to go out and spend billions of dollars on linear broadcast sports rights because I think there’s a way we can deliver and fulfill the needs and motivations of our sports fans inside of our ecosystem in a far more deliberate way that is far more aligned with how they want to consume that content. And so we do think there is an incredible opportunity.
I do think that we’re at $600 million getting to $1 billion is a no-brainer. I’m change that things, how do we get a $2 billion or $3 billion. We know that this audience is growing. We know that this audience is spending more time in and around the things that we do, and we know that we are unique in our ability to do it at a time where many of those that maybe we should be most scared of are pulling back. And also know that we’re not arrogant, I will not overcome I tell our teams never underestimate these giant companies that have innovative DNA monopolistic tendencies in deep pockets.
We always have to ask ourselves what happens if they get it right. But as of today, we have this very, very unique and special opportunity to deliver the future of entertainment and to deliver that through engaging and entertaining these global online communities, and we’re going to start with our biggest franchises. We’re going to support that with the depth and the breadth of our broader portfolio. We’re going to extend beyond the bound of traditional game experience, and that’s probably going to allow us to do new and interesting things for these generations as they grow over the next 5 or 10 years.
Eric Sheridan
Got it. And last topic I wanted to get your perspective on. Obviously, we’ve seen a lot of industry consolidation over the last 1 to 2 years, we’ve seen companies like yourself buy mobile companies. We’ve seen mobile and gaming companies buy ad tech companies. distributors look at publishing assets. How do you — what’s your perspective on what we are seeing in some of the moves that have been publicly announced in terms of driving this layer of industry consolidation at this point in time? And how do you think some of these nuances might evolve in the next couple of years?
Andrew Wilson
Well, I think 2 things are true. One, the content ant the timing, just about any industry as it turns out over the course of time, you see consolidation. We saw it in book publishers. We’ve seen it in TV networks, movie studios. I mean this is not unnatural. And it’s even happened in our industry. I started 22 years ago, there’s only 30 companies that no one knows about today because they’re gone, they’ve been purchased or they’ve gone away. And so industry consolidation in any category, particularly entertainment, is always going to be a factor. And I think we should expect it to continue.
The second thing I think we’re seeing is people are recognizing that this is the future of entertainment that we’re not going to give up watching television and movies and listening to music and go in the back. We’re not going to give up that stuff. But the foundation of all entertainment is going to be interactive. The foundation of everything that we choose to do first is going to start with this.
And in a world where many have tried over the last 2 decades and many billions of dollars invested and failed, I think that this represents an opportunity to get in the game and the only opportunity to get in the game. For us, I think that we are in an extraordinary position as an independent company. I’d love to believe that we can grow this thing to $100 billion in value, $200 billion in value, which is not unnatural.
If you think about 4 or 5 franchises, the size of EA SPORTS FC, if you think about engaging a social community beyond the bounds of video games at the $1 billion strong, if you think about what that might let us do in terms of disrupting the consumption of sports and media more broadly over the course of time, it’s not unnatural that we could be $100 billion, $200 billion. And then maybe we’re doing some bigger consolidating, but we have deep ambition but we also have extraordinary commitment to our player base. And for us, we think we’re in a wonderful opportunity, and we want to make sure that we seize this moment, invest for the future, but do it in a very focused and disciplined way.
Eric Sheridan
Great. Andrew, well, thank you so much for taking the time. Really enjoyed the conversation. Please join me in thanking EA for being part of the conference this year.
Andrew Wilson
Thanks so much.
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