Aug 2, 2022
Electronic Arts Revenue Forecast Falls Short on Gaming Slump
, Bloomberg News
(Bloomberg) -- Electronic Arts Inc. gave a forecast for revenue in the current quarter that fell short of analysts’ estimates amid a slowdown in spending on video games and equipment.
Adjusted revenue, or bookings, which excludes deferred sales from content purchases and other adjustments, will be $1.73 billion to $1.78 billion in the fiscal second quarter, the game publisher said in a statement on Tuesday. Analysts were expecting $1.86 billion on average, according to data compiled by Bloomberg. In the first quarter, adjusted revenue was $1.3 billion, largely in line with estimates.
Known for its Star Wars and sports games, Electronic Arts has yet to release any major new titles this year and is still grappling with fallout from Battlefield 2042, which was released last November to mediocre reviews and poor fan reception. EA acknowledged earlier this year that the game failed to meet expectations and “did not resonate with fans.”
The video game industry is off to a sluggish start this year, hampered by hardware supply chain issues affecting consoles, inflation and a lack of big hits. Interest in gaming has also cooled as pandemic stay-at-home orders lifted and people resumed outside interests and activities. Spending in the video game industry is expected to drop 8.7% this year, according to analytics firm NPD Group. On Monday, Activision Blizzard Inc. reported adjusted sales declined 15%.
Although EA’s release schedule has been slow this year, the company plans to launch entries in its Madden NFL and FIFA series later in 2022. In May, EA announced its 30-year licensing agreement with soccer governing organization FIFA would end after this year. The hugely popular series will be renamed EA Sports FC.
In early 2023, EA plans to release a remake of 2008 survivor horror game Dead Space and the highly-anticipated Star Wars Jedi: Survivor. Its shooter Apex Legends remains enormously popular and is the sixth most-watched game on Amazon.com Inc.’s livestreaming site Twitch. EA says its player network -- a service that connects gamers across platforms -- grew to 600 million active accounts.
Electronic Arts reported net income of $311 million in the fiscal first quarter, up from $204 million a year earlier. Adjusted earnings per share were 47 cents, beating analysts’ estimates for 28 cents.
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