EA Stock Drops 18% After Investor Relations Call About 'A Difficult Quarter'
EA's investor call took place earlier this week with some surprising admissions from CEO Andrew Wilson. "Q3 was a difficult quarter for Electronic Arts and we did not perform to our expectations." While Battlefield V sold 7.3M copies, it was nearly a million units short of projections largely due to the month-long delay of its release. "Unfortunately the release date meant the game launched deeper into a competitive holiday window," Wilson said.
Wilson alluded to Fortnite, arguably the "elephant in the room", without mentioning it by name. Speaking about the decision to focus on the single player aspect of Battlefield V over a battle royale mode, Wilson said, "This year, battle royale modes became incredibly popular in shooter games. As a result of these decisions, we struggled to gain momentum and we did not meet our sales expectations for the quarter."
As a result of yesterday's investor relations call, EA stock closed down 18%, dropping from $92.52 to $75.20.
Other factors leading to the "difficult quarter" include:
- an increasingly difficult mobile market to succeed in where the average age of games in the top 20 is 3 years
- a weak market in Asia including "nuances in China"
We made some calculated decisions that did not work as planned in Q3, and we did not execute well in other areas of our business. Against the backdrop of a very competitive quarter, the combination of those factors led to our underperformance. While we are disappointed with the results, we understand where our challenges are, and we are deeply focused on applying the strengths of our company to address them going forward.
On the plus side:
- EA expects Anthem to sell six million copies over the first several months of live service.
- Respawn has plans to launch a premium Titanfall game, though it is not Titanfall 3
- continuing series such as FIFA and Madden NFL
- NHL and NBA games are in the works
- new Need for Speed
- a new Plants vs Zombies game
- Star Wars Jedi: Fallen Order is coming this fall
- strong expectations for The Sims franchise