Recently we conducted investigations were we concluded that EA’s stocks are dropping due to low Battlefield 4 sales. Our conclusion has been indirectly confirmed when we saw Battlefield 4 on sale for only $20-$30 during Black Friday and Cyber Monday. Someone is trying very hard to iron out a very bad financial situation.
Well, apparently we are not the only ones who were keeping our eyes open. Market analysts have also been monitoring the situation quite thoroughly, and they have also come to the same conclusion. Battlefield 4 sales are lower then what was expected and EA is getting heavy hits from unsatisfied customers.
EA’s shares have dropped more than 7% on Thursday since the market was worried about the future of the Battlefield franchise and the future of the upcoming titles (Mirrors Edge 2 and Star Wars: Battlefront) as well.
Earlier EA had announced that DICE will stop working on the upcoming game titles and DLC’s until they polish Battlefield 4 and make this game playable. The shareholders and the market apparently didn’t like this. But what they also didn’t like is the statement from Sterne Agee analyst, Arvind Bhatia, who said that the longer the Battlefield 4 glitches and crashes persist the more it is going to hurt EA from a financial standpoint. Battlefield 4 sales are also down substantially compared to Battlefield 3 last year.
“The server issues further exacerbate this and create risk to full-year estimates,” Bhatia said.
Pacific Crest analysts Evan Wilson and Bryan Liang also mentioned that EA and DICE’s move to hold off all of the future projects “confirms the disappointment of this year’s launch”, “It also puts a Battlefield game next year at risk, especially after management hedging on the subject at recent investor conferences,”
Without EPS (earnings per share) growth for the year starting April 1st it “is unlikely,” the Investment Bank adds.
Sport games and the Battlefield franchise make 50 of EA’s income so its no wonder analysts are worried when it comes to the future of the company, the future of the Battlefield games as well as all of the other titles that will be released.
It’s funny the situation EA and DICE have got themselves into, if they try to put out a fire in one place they simultaneously start another one in a whole different area. Its the same way DICE’s patches work.
The real question is, have EA and DICE learned anything from this experience and are they going to improve in the future? One of the main marketing points for Battlefield 4 was that this time the developers will listen to their community, and that they will not permit mistakes that happened in Battlefield 3.
However we now see that all of that was just pure marketing and PR stunts.
After another EA announcement where they stated that no future projects will be delayed, EA stock prices have bounced back, and are up more than 5.5%. EA’s shares are currently trading at $22.17 and are now almost on the level with Wednesday’s closing price of $22.34.