EA revenue forecast misses estimates following Battlefield flop
ELECTRONIC Arts (EA) reported revenue for the current quarter that missed analysts' estimates, as the video game publisher continues to feel the effects of an industry-wide downturn and the flop of last fall's Battlefield game.
The video game publisher, known for its Star Wars and sports games, said adjusted revenue for the 3 months ending Jun 30 will be US$1.2 billion to US$1.25 billion. Analysts had expected US$1.45 billion, according to data compiled by Bloomberg.
"With amazing games, built around powerful IP, made by incredibly talented teams, and outstanding engagement in our live services, FY23 is set to be a year of innovation and growth for Electronic Arts," said chief executive officer Andrew Wilson in a statement.
EA has yet to release any major titles in 2022 and is still dealing with fallout from Battlefield 2042, which was released last November to mediocre reviews and poor fan reception. EA acknowledged earlier this year that the game failed to meet expectations and "did not resonate with fans".
Earlier on Monday (May 9), EA said it's ending the lucrative licencing agreement it has had for nearly 3 decades with Fifa, the world's football governing body. Fifa, one of the most popular video games, will be renamed EA Sports FC, effective next year, EA said, adding that it will share more information about the new franchise in July 2023. This year's game is expected to be released in the fall under the name Fifa 23. EA is also planning to release a new entry in its annual Madden NFL franchise.
The company is also expected to soon share more information about its upcoming Star Wars titles, such as a sequel to 2019's popular Star Wars Jedi: Fallen Order. And shareholders are looking for the company's next moves in the lucrative mobile market, where another new Battlefield title is expected soon. On Monday, EA announced that it's developing a mobile game based on the popular fantasy franchise The Lord of the Rings, in partnership with Middle-Earth Enterprises.
EA, based in Redwood City, California, is poised to become the biggest dedicated game publisher in the US if Microsoft's planned US$69 billion acquisition of Activision Blizzard is approved by next year. EA is a potential player in the industry's current wave of consolidation and could be either a target or a buyer in the field, like Take-Two Interactive Software, which purchased the mobile company Zynga for US$11 billion. Industry observers are carefully watching Ubisoft Entertainment, which has been the centre of speculation about a sale.
For the fiscal fourth quarter, EA just missed analysts' expectations with revenue of US$1.75 billion, compared with the average estimate of US$1.77 billion. Earnings per share, excluding some costs, were US$1.46, compared with the average estimate of US$1.42. BLOOMBERG
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