Electronic Arts: Expect Additional Estimate Reductions As Battlefield V Sales Disappoint

Summary

• Battlefield V suffered from consumer backlash as a less authentic portrayal of WWII was revealed.
• EA formally revised FY 2019 net bookings guidance; the outlook was revised from $5.55 billion to $5.20 billion.
• The limited nature of Battlefield V’s single player campaign at launch, unimplemented cooperative missions and the delay for the battle royale mode frustrated players.
• All the major retailers currently have the title on sale for 33% to 50% off.
• As hard sales data comes forward in January, look for additional downward revenue revisions from analysts and corresponding pressure on the stock price.

Since peaking in July, shares of Electronics Arts (NASDAQ:EA) have fallen over 45% and set a fresh 52 week low on Monday. Though the broader technology market has suffered in recent months, EA’s outsized declines are caused by concerns over unit sales of the company’s tent-pole Battlefield franchise. This year’s release, titled Battlefield V, suffered from consumer backlash as a less authentic portrayal of WWII was revealed over the summer. At the end of August, the company announced they were pushing back the game’s release date from October until November “to deliver the best possible experience for gamers”. Alongside this announcement, full-year net bookings guidance was cut by $350 million dollars. While the reviews for the new game mechanics and play style have generally been positive, the level of initial content and the new content release model is dragging down review scores and frustrating players. Sales and engagement stats from the post launch weeks point to underperformance versus the now lowered analyst expectations and the revised company guidance.

Politics Injected Into Battlefield V

Players got their first look at Battlefield V in May with the drop of the official reveal trailer. While players had expected an authentic World War II setting, the first trailer primarily focused on the female soldier seen below. Note her prosthetic arm and blue face paint. Other shots included nontraditional melee weapons such as a katana and a cricket bat. The trailer served to confuse gamers about the title’s direction and reaction was overwhelmingly negative. To date the YouTube trailer has garnered 13 million views with 340 thousand upvotes and 500 thousand downvotes. For a qualitative comparison only, the 2016 Battlefield I release trailer has received 60 million views, but with 2.2 million upvotes to 44 thousand downvotes.

In an interview by Gamasutra at the E3

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