EA stock is facing its worst drop in more than a decade, with CEO Andrew Wilson warning that the "significant challenges" it faced during the third fiscal quarter would carry on through the fourth. This is in part due to Battlefield 5's performance, which sold a million fewer copies than EA had anticipated.
By Tuesday, the company's stock had declined by around 18 percent. As MarketWatch notes, it's the most significant decline of the millennium for EA, and brings it close to its largest ever decline, which was on December 17, 1999. It dropped by 25.5 percent. At the time of writing, it's started to rise slightly, fluctuating between 15 to 17 percent.
In a conference call, Wilson also mentioned Battlefield 5's delay, and that its launch around the holidays meant that it was often discounted to ensure it could compete with the other games vying for the attention of holiday shoppers.
“As a result of these decisions, we struggled to gain momentum and did not meet expectations for the quarter,” Wilson said. “We made some calculated decisions that did not work as planned in Q3 and we did not execute well in other areas of our business. Against the backdrop of a very competitive quarter, the combination of those factors led to our underperformance.”
EA did post an increase in both revenue and profit, though. The net income for the third financial quarter was $262 million, with revenue amounting to $1.29 billion. During the same three month period last year, revenue was $1.16 billion. Net bookings, however, fell. These take into account commitments like annual subscriptions, and EA reported a drop from $1.97 billion to $1.61 billion.
February is undoubtedly going to be an important month for EA. Anthem is due out on February 22—after a tumultuous demo—and Respawn's free to play Apex Legends just popped into existence. The latter's launch was improbably smooth, which bodes well for the future. I spent all of last night getting demolished by people much better at the game than but still managing to have a hoot, and I found it hard to believe how polished and hassle free it was. I've grown far too used to early access launches and betas, I forgot what it was like to play a multiplayer game that's simply ready. Within 24 hours, it already had one million unique players.
If one of those games is going to get EA out of trouble, I'd bet on Apex Legends.