Electronic Arts (EA) has revised its full-year revenue projections downward, citing underperformance in key game titles. The company's flagship soccer franchise, now known as EA Sports FC, has experienced a significant slowdown after years of robust growth. Additionally, the role-playing game "Dragon Age" fell short of player engagement targets. These factors have led to a 7% drop in EA's stock during extended trading. For the fiscal third quarter ending December 31, the company anticipates net bookings of approximately $2.215 billion, lower than previously forecasted. Revenue is expected to be around $1.88 billion, with diluted earnings per share at $1.11. The annual projection for net bookings has also been adjusted to between $7 billion and $7.15 billion, reflecting the challenging market conditions.
The downturn in EA's performance can be traced back to changes in consumer behavior and market dynamics. After two years of double-digit growth in net bookings, the Global Football series began showing signs of deceleration during the December quarter. This shift marks a significant change for a franchise that has dominated the soccer video game market since 1993. Following the end of EA's partnership with FIFA in 2022, the company rebranded its soccer games under the EA Sports FC label. Despite efforts to update and enhance the latest release, FC 25, with new content and gameplay improvements, sales and online service revenues have not met expectations. The company attributes this decline to a combination of increased competition and changing player preferences.
In addition to the soccer franchise, EA faced challenges with its recently launched role-playing game, "Dragon Age." The title attracted only 1.5 million players during the quarter, significantly below the anticipated target. This shortfall highlights the difficulty of capturing audience interest in an increasingly saturated gaming market. CEO Andrew Wilson acknowledged these issues, stating that while the company continues to deliver high-quality experiences across its portfolio, certain titles did not perform as well as hoped. The company remains committed to addressing these challenges and improving future releases.
The upcoming months will be critical for EA as it prepares to release its third-quarter earnings report on February 4. The company has already taken steps to refresh its offerings, including updating FC 25 with new content and features. While the current financial outlook may be less optimistic, EA is focused on revitalizing its core franchises and exploring new opportunities in the gaming industry. The company's resilience and adaptability will be put to the test as it navigates these market shifts and strives to regain momentum in the coming year.