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(Adds context to paragraph 8, analyst’s comment to paragraph 9) by Arsheeya Bajwa
Video game publisher Electronic Arts EA.O cut its annual revenue forecast on Wednesday, citing weakness in its popular soccer franchise, sparking concerns the major sports division is slowing and caused the stock to fall by almost 11%.
Growth in the “Global Football” business petered out toward the end of the third quarter, following two consecutive fiscal years of double-digit increases in net bookings, the company said.
Dragon Age and EA Sports FC 25 failed to meet expectations for net bookings in the third quarter, chief executive Andrew Wilson said in a statement, revealing sluggish demand for one of the world’s most notable and popular titles. valuable to society.
This contrasts with the general trend of gamers on tighter budgets sticking to long-running online games. The EA Sports FC 25 game is one of the most popular sports titles.
The company estimated net bookings for fiscal 2025 to be between $7 billion and $7.15 billion, compared to previously forecasting between $7.5 billion and $7.8 billion.
Analysts on average expected $7.69 billion, according to data compiled by LSEG.
-In September 2023, EA launched its first “FC” soccer game without the FIFA label, hoping the titles will maintain the momentum of its best-selling franchise after the end of a nearly three-decade partnership with the world football body.
The company’s shares fell nearly 10% in extended trading, which is expected to erase nearly $4 billion in market valuation at current levels.
Investors are also concerned about college football’s penetration of sales of the new Madden title. The company had launched a bundle including both games in hopes of addressing these concerns.
“The shortfall is primarily due to the introduction of College Football last summer, which was phenomenally successful, but likely caused some cannibalization of Madden NFL sales,” said Wedbush analyst Michael Pachter. Securities.
In its preliminary results released Wednesday, EA said it expected net revenue of about $2.22 billion in the third quarter, which is below the 2.4 to 2.0 billion range. 55 billion dollars that it previously forecast. Analysts on average expected $2.51 billion.
EA forecast earnings of $1.11 per share, in line with estimates. It previously forecast earnings per share of between 85 cents and $1.02.
The company will report its third-quarter financial results on February 4.
