EA Has "Difficult Quarter," Stock Price Nosedives
Battlefield 5 failed to meet sales targets amid a "tumultuous" year for gaming, EA says.
Video game giant Electronic Arts reported earnings today for its fiscal third quarter ended December 31, and it could have gone better during the all-important holiday period. While EA did post gains in revenue and profit, the company said in its official remarks that it was a "difficult quarter" that saw the company fail to meet its commercial expectations.
CFO Blake Jorgensen said in prepared remarks that 2018 was a "tumultuous" year for the gaming industry overall. Though he did not share any specifics, he might have been referring to the way in which the absolute juggernaut Fortnite shook up the industry in the past year. Not only that, but Red Dead Redemption 2's release in October might have impacted sales of EA's games.
While it might not have been the quarter EA wanted, Jorgensen said EA is "making adjustments to improve execution and we're refocusing on R&D." EA CEO Andrew Wilson said the company is looking to "sharpen" its execution going forward.
One title that struggled during the period was Battlefield 5. The World War II shooter sold a massive 7.3 million copies, but this was 1 million shy of what EA expected. For more on this underperformance, you can check out this story that explains the downturn.
EA just recently launched the free-to-play Titanfall battle royale game Apex Legends, and it's off to a fantastic start with 2.5 million players and 600,000 concurrent users after just one day. Beyond that, EA will launch BioWare's new game, Anthem, later in February, and it's expected to sell as many as 6 million copies by the end of March. Additionally, EA is working on new Plants vs. Zombies and Need for Speed games, along with Star Wars Jedi: Fallen Order for this year. On top of that, more Titanfall is coming, while all of the usual sports games are expected as well.
This is all to say that while EA's latest financial quarter might not have been the rosiest, the company is still doing just fine and it has a pipeline of major titles in the works. It made $1.29 billion in revenue over the three-month period and a profit of $262 million; both figures are up year-over-year. Despite those gains, EA's stock price is free-falling; it's down more than 15 percent in after-hours trading currently.