Electronic Arts (EA) shares sank nearly 15% after the soccer game franchise underperformed, dragging down revenue and profits. The company introduced “FC 25,” its newest soccer title in September, but it received mixed reviews for lacking innovation and new features like better physics and scoring mechanisms. A sweeping update followed, which players praised, but the early reaction caused a stumble.
The game’s weak performance also contributed to lower live-service bookings. Additionally, the role-playing game “Dragon Age: The Veilguard,” launched in October, underperformed due to economic uncertainty. This came after EA raised its annual forecast based on strong American Football titles like “Madden NFL” and “College Football.”
Analysts warn that EA’s stock value may fall further, dropping nearly $6 billion from a market cap of $37.3 billion. The company relies heavily on soccer titles for revenue but struggles with “Ultimate Team,” which accounts for 80% of live-service income. With “FC 24” performing well in 2023 and FIFA games rebranded, EA faces pressure to maintain growth without relying solely on soccer.
Current stock trading at nearly 17 times earnings estimates is down from Take Two Interactive’s 27.72. Analysts highlight the importance of “Ultimate Team” for future bookings and express concern about its stagnation. The broader gaming market remains uncertain, further weighing on EA’s performance.
Source: https://www.reuters.com/technology/ea-shares-slump-after-annual-forecast-cut-fans-fears-over-soccer-franchise-2025-01-23