EA Falls Most Since February as Snag in Apex Legends Sows Doubts

(Bloomberg) -- Electronic Arts Inc. was the worst performing stock in the S&P 500 index Friday, as the second-season release of "Apex Legends" hit a snag, raising concerns the new version of the publisher’s latest smash-hit may not satisfy gamers as hoped.

Optimism may have been too high. In early June SunTrust told clients trade press reviews had skewed positive for the game’s rebirth with improvements to weapons and maps.

EA has benefited from Apex Legends’ early growth, but signs that uptake is cooling-off now call into question whether the game can become a formidable competitor to Epic Games Inc.’s Fortnite -- a phenomenon that has had video-game publishers scrambling to catch up.

“A lot of people were expecting this season to kind of blow them out the water,” Nick Licouris, an investment adviser covering video games at Gerber Kawasaki Inc said. “I wasn’t too impressed” and EA really needs Apex Legends to be cross-platform in order to take to it to the next level. “That was one great thing that Fortnite did.”

EA Falls Most Since February as Snag in Apex Legends Sows Doubts

Shares in the company saw their biggest decline in five months Friday, falling as much as 5.6% intraday. Video-game peers also fell, with Activision Blizzard Inc. down as much as 4.2% and Take-Two Interactive Software Inc. down 2.4%.

Adding to the shift in sentiment, a flaw in one of the free-to-play battle royale game’s characters surfaced in a Reddit video on Thursday, concerning some users that a perimeter security capability reveals the exact location of the Wattson character when breached. But EA says it’s not aware of any bug with Wattson or major issues with the new season.

“A few players have reported issues with redeeming the Twitch Prime Wattson skin, which we’re working on, but that’s not a gameplay issue, and it’s only a very small number of players,” a company spokesman said.

Even so, it is still early days for the second season release. People “are making a big deal out of Twitch views,” Wedbush analyst Michael Pachter said in an interview. While Twitch views will matter ultimately, the game has only been out a few days, he said. “People are complaining about the server crashes, not the content of the game itself.”

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