EA Revises Revenue Forecast After EA Sports FC 25, Dragon Age: The Veilguard Sales Disappoint
Electronic Arts shares sank more than 15 percent on Thursday, tripped up by a surprise slowdown in spending on the soccer franchise that has shaped its gaming empire.
The videogame maker debuted its newest soccer title, FC 25, in September, the latest in a series of top sellers. But this version did not get the warm reception its predecessors did, denting revenue in the live services segment, EA's biggest earner.
FC 25 was hit with mixed reviews as players bemoaned the lack of new features and innovation, including in-game physics and goal-scoring mechanisms, Jefferies analysts said.
The vocal criticism led to a sweeping update in January that "received overwhelmingly positive player feedback", the analysts added.
As a result of the early underperformance, however, EA lowered its annual revenue forecast on Wednesday. It also projected a mid-single-digit decline in annual live-service bookings.
Weak spending on its Dragon Age: The Veilguard role-playing game, launched in October, also contributed to the cut as players stick with proven titles in an uncertain economy.
The move marked an about-turn for the company that had raised its annual bookings forecast just in October, banking on the strong performance of its American Football titles -- Madden NFL and College Football.
EA was on Thursday set to lose nearly $6 billion (roughly Rs. 51,753 crore) from its market value of $37.3 billion (roughly Rs. 3,21,684 crore), if the losses hold. The stock trades at nearly 17 times its 12-month forward earnings estimates, compared with Take Two Interactive's 27.72.
EA makes money both through sales of its soccer titles as well as spending by players within the game on services such as "Ultimate Team", a mode where people can use in-game currency to purchase players for teams that compete in online matches.
EA FC generally sells around $2 billion (roughly Rs. 17,248 crore) annually, of which live-service revenue makes up $800 million (roughly Rs. 6,901 crore), according to
Read more on gadgets.ndtv.com
