Electronic Arts Delays Popular Video Game, Sinking Stock
Electronics Arts Delays Popular Video Game, Cuts Forecasts
(Bloomberg) -- Electronic Arts Inc. delayed the release of its next Battlefield video game, highlighting the challenges for established game makers to keep up with Fortnite, the shooting-game sensation that has taken the industry by storm.
The launch date of Battlefield V was delayed by four weeks to Nov. 20, and EA also cut its forecast for the fiscal year ending in March. The news sent the shares down as much as 8.7 percent on Thursday, the most since January 2016. Battlefield is a first-person shooter game, known for its realistic depiction of combat, and is one of EA’s biggest franchises.
“We’re updating our fiscal-year guidance to reflect the updated launch date for Battlefield V, the ongoing impact of foreign-exchange rate changes, and our current outlook for our mobile business,” Chief Financial Officer Blake Jorgensen said in a statement.
The delay adds to recent setbacks for the video-game maker. Its earnings forecast on July 26 fell well short of Wall Street estimates, sending the shares tumbling. Patrick Soderlund, who runs EA’s worldwide game-development studios, is set to leave in October to pursue “his next life adventure.” And this week EA canceled three Madden Classic qualifier events following a shooting at an earlier competition in Florida.
EA, like much of the industry, is coping with a shift to mobile gaming. In a nod to the remarkable success of the every-man-for-himself shooter game Fortnite, EA said on June 9 it would include a battle-royale mode in the upcoming Battlefield V.
Fortnite, made by closely held Epic Games, has become a cultural phenomenon since its release last year, attracting more than 125 million players worldwide and causing the video-game industry to rethink its game designs and business models. Like Battlefield, it is also a first-person shooter game, but the two have an important difference: Battlefield’s fan base is made up of hard-core gamers, while Fortnite doesn’t depict combat realistically and has proven strong among more casual players.
In its statement, EA said it now sees net bookings of $5.20 billion for the fiscal year 2019 ending in March, down from $5.55 billion previously.
The shares fell to $117.61 at 10:48 a.m. in New York. The stock had climbed 22 percent this year through Wednesday, when it closed at $128.52.
EA vowed the delay would result in a better Battlefield experience, according to a blog statement.
“You’ve also spurred us to make some meaningful improvements to the core gameplay experience, including adjusting the gameplay tempo, improving soldier visibility and reducing player friction,” EA said. “You’ll see a lot of these reflected in our Open Beta that starts on September 6.”
--With assistance from Karen Lin.
To contact the reporters on this story: Jessica Brice in Sao Paulo at jbrice1@bloomberg.net;Christopher Palmeri in Los Angeles at cpalmeri1@bloomberg.net
To contact the editors responsible for this story: Cecile Daurat at cdaurat@bloomberg.net, ;Nick Turner at nturner7@bloomberg.net, Rob Golum
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