EA faces Battlefield slump as free-to-play games rise
Electronic Arts lowered its revenue outlook on Tuesday, hit by lacklustre sales of its newly launched Battlefield V title, which faces stiff competition from Red Dead Redemption and upstart online games like Fortnite.
Shares of EA slid nine per cent in after-hours trading following the news.
The video-game maker cut its projections for fullyear adjusted revenue to about US$4.75 billion from US$5.20 billion and said it had faced a challenging third quarter.
“The video-game industry continues to grow through a year of intense competition and transformational change,” chief executive Andrew Wilson said in a statement.
“Q3 was a difficult quarter for Electronic Arts, and we did not perform to our expectations.”
Redwood City, Calif.based EA owns iconic franchises such as Battlefield and FIFA, but the sudden rise of online, often free-toplay games such as Fortnite have challenged the dominance of traditional game publishers like EA, Activision Blizzard and Take-Two Interactive Software Inc., among others.
Epic Games launched a popular battle royale mode for Fortnite in September last year, allowing up to 100 online players to battle each other to the death until only one survives.
During December, EA’s Battlefield V finished behind Activision’s Call of Duty: Black Ops 4 and Take-Two’s Red Dead Redemption 2 in terms of dollar sales, according to market research firm NPD.
For the third quarter that ended in December, EA reported adjusted revenue of US$1.61 billion, well below Wall Street analysts’ average estimate of US$1.75 billion, according to IBES data from Refinitiv.