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FIFA Game Sales Slowing Down; Is EA Boned?

EA is unproven when it comes to non-sports games, stated Jefferies analyst Timothy O’Shea (via CNBC) when he warned clients of investing in the gaming giant. The Wall Street broker downgraded EA shares to hold from buying yesterday because EA’s 2019 lineup of upcoming games consists of untested properties.

This problem is exacerbated with the slowing sales of FIFA (and its other sports-based franchised) and Need For Speed, which has sparked fear amongst its investors and shareholders.

“When EA brought loot boxes to Star Wars Battlefront 2, the fan backlash was swift and severe,” added O’Shea. “Battlefront 2 dramatically underperformed its original estimates, and bowing to pressure EA capitulated to gamers by removing loot boxes from the game. This was a first important sign that Ultimate Team growth would begin to stall.”

EA will be publishing games like Bioware’s Anthem in 2019, whose reaction has been lukewarm and indifferent at best even as its release date nears. The company has also recently come under heavy scrutiny for canceling yet another Star Wars game, highlighting the criticism that EA doesn’t really handle its non-sports properties very well.

Additionally, there’s also the fact that Battlefield 5 sales have not been performing up to EA’s expectations, resulting in a much lower earnings projection for the company’s fiscal year in 2019.

“Non-sports games is precisely the area where EA has the most to prove,” said O’Shea. “Excluding sports games, EA has launched a string of misses. Mass Effect Andromeda got a 71 Metacritic. Need for Speed got a 62 Metacritic rating. And Star Wars Battlefront 2 saw a massive fan backlash.”

Is EA’s Future Looking Bleak?

It looks like gamers are not the only ones to have lost faith in EA, but also investors and other companies as well. Due to this, O’Shea has cut his price target on EA shares from US$139 to US$95, which is a massive decrease in stock value.

The question now is whether EA will be able to sustain itself despite the dwindling sales and critical reception of its once-reliable franchises (read: moneymakers) like FIFA and Battlefield. 2019 will be the year where the answer will start revealing itself, beginning with the upcoming release of Anthem for the PS4, Xbox One, and PC on 22 February 2019.


 

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