EA Lost $3.1 Billion in Stocks Over Battlefront II

EA Lost $3.1 Billion in Stocks Over Battlefront II

Electronic Arts' shareholders are running for the hills this month and for good reason.

The company's profitable business model is now at risk after angry gamers revolted over its aggressive in-game moneymaking strategy in "Star Wars Battlefront II." EA's stock is down 8.5 percent month to date through Tuesday compared with the S&P 500's 2 percent gain, wiping out $3.1 billion of shareholder value. Its competitors Take-Two and Activision Blizzard shares are up 5 percent and 0.7 percent respectively during the same time period.

After EA gave a December quarter sales forecast slightly below Wall Street estimates on Oct. 31, some analysts suspected it was due to the "Stars Wars" title. The shares fell 4 percent the following day. Then an uproar began after details about the game's character progression were revealed, a system so tedious players are resorting to rubber bands on controllers to acquire credits to level up.

First week U.K. physical game sales of "Star Wars Battlefront II" declined 61 percent compared with "Star Wars Battlefront" from two years ago, according to GfK ChartTrack data. And the game is still not on the top 100 list of Amazon's best-selling video games year to date as of Tuesday.

The game's weak sales are a secondary issue for Electronic Arts. The viability of its profitable micro-transaction strategy is now in question going forward.

EA chief financial officer Blake Jorgensen told investors in February its "Ultimate Team" sports micro-transactions business generated $800 million in high-profit margin sales for the company during the previous year. He added EA intended to extend a "similar mechanic" to its other franchises such as "Battlefield" and "Battlefront."

Now that whole strategy is at risk.

Replies 282

pommedetere

I just want to add to this conversation that it's interesting microtransactions blew up in this instance, but many people play mobile games without any complaint, shelling 100's to 1000's for basically lootbox gatcha pulls.

Still looking for black desert online + explorer pack from failed giveaways. PM me!

-Gwynbleidd-

Ну они себе ето могут позволить!


disss666

Microtransaction = evil!


Tatun

EA's stocks will most likely start rising again soon after the Battlefront debacle settles down. They're still up $30 from the beginning of the year.


-Scoundrel-

What a joy


BlackLey

They paid for their greed.


manson201

у EA часто проблемы


resss

what a good news 


rachidtaha

a big lesson for EA? I hope they understood the message

don't worry everything will be fine

z1o6a

Заслужили, на самом деле.


  • 440 Points

INFORMATION

Leading gaming YouTube personalities believe EA will be forced to change its practices after the "Star Wars Battlefront II" micro-transaction controversy. "After the communal and political backlash EA received over Battlefront II, the industry at large is going to have to walk back its loot box plans a little," Jim Sterling writes in an email.

Published by pommedetere

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