The hot season of EA’s discontent

On the cusp of what should be its happiest holiday season yet, Electronic Arts EA -0.54%

found some lumps of coal in his stockpile.

The combination of strong gaming performance and a recent wave of acquisitions is giving the video game publisher a boost. Net bookings, measuring both game sales and in-game transactions, are expected to total nearly $ 4.5 billion in the second half of calendar year 2021, according to FactSet. That would be a 35% increase from the same time period last year, by far the best-predicted growth in an industry facing tough comparisons from an increase in gameplay during last year’s lockdowns. Six other major game publishers are expected to average stable sales for the same period, according to FactSet data. Planned net bookings of $ 2.7 billion for the December quarter would mark a record for the company.

But EA’s action is still under pressure. The company delayed the release of “Battlefield 2042” last month, citing a slower production process with so many of its developers still mostly working from home. This release was only pushed back a month to November 19, but a beta test of the game last week generated some bad buzz on Reddit, apparently due to technical issues. EA shares are down 7% since announcing the release delay on September 15.

Another surprise emerged last week: In an Oct. 7 statement touting the successful launch of “FIFA 22,” EA said it was “exploring the idea of ​​renaming” its mega-popular football franchise. This was seen as a sign that its negotiations with the FIFA organization on a new deal are not going well. The FIFA franchise is by far EA’s largest; Analysts estimate that the game and its Ultimate Team expansion will generate nearly $ 2.5 billion in revenue for EA’s fiscal year ending in March, according to consensus estimates on Visible Alpha. This would represent about a third of the company’s total turnover.

That said, concerns about the future of FIFA gaming seem overblown. In a statement last week, EA Sports director Cam Weber noted that the franchise is governed by more than 300 agreements with teams, leagues and player unions. This means that the company that has been selling their football franchise since the early 90s would still be able to fill their games with real players and teams, even under a different name. No competitor seems close to being able to do the same. Rival game maker Konami launched a competitive football title called “eFootball 2022” late last month that has already garnered much scorn; The influential games publication Kotaku describes the game as “a complete disaster”.

Battlefield may be a bigger question mark until the new game hits the market. Public beta releases usually have bugs and technical issues that are addressed by the game’s release. Regarding “Battlefield 2042,” Jefferies analyst Andrew Uerkwitz wrote that “player reviews beyond a few negative titles seem positive ”. Meanwhile, Cowen’s Doug Creutz noted that the game’s viewership on Twitch far exceeds that of “Call of Duty: Vanguard,” Activision Blizzard’s next installment.‘s

best-selling shooting franchise.

Yet EA has had a few hiccups with this property in the past. The latest release – “Battlefield V” of 2018 – garnered some of the lowest critical scores in the franchise and therefore disappointed financially. But the company has also significantly expanded its shooter business with “Apex Legends,” a “Fortnite” style battle royale game that has proven to be a surprise blockbuster since its release in early 2019. Analysts estimate that Apex will generate around $ 745 million in revenue for EA’s current fiscal year compared to the $ 550 million forecast for Battlefield, according to Visible Alpha. After nearly four decades in the gaming industry, EA knows only too well how to pack a lot of extra ammo.

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Write to Dan Gallagher at [email protected]

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