In an alarming development for Electronic Arts (EA), the company has revised its full-year bookings forecast downward, primarily attributing the change to disappointing performance within its flagship soccer series, EA Sports FC. The downgrading led to a significant drop in EA’s share price, which fell by 7% in after-hours trading, signaling investor concern over the company’s future earnings potential. This shift reflects broader worries about the sustainability of EA’s revenue, especially given the company’s historical dominance in the sports gaming sector.
For the fiscal third quarter, which concluded on December 31, EA now anticipates reporting net bookings of approximately $2.215 billion—a stark contrast to earlier projections that estimated figures between $2.4 billion and $2.55 billion. Such adjustments underline a troubling trend, as EA’s revenues are expected to reach about $1.88 billion for the December quarter, with diluted earnings per share forecasted at $1.11. Furthermore, the forecast for total net bookings over the fiscal year, ending March 31, has been revised to a range of $7 billion to $7.15 billion, down from an earlier forecast of $7.5 billion to $7.8 billion.
The setbacks faced by EA Sports FC can be partly attributed to the dissolution of its partnership with FIFA in 2022. This significant shift not only stripped the franchise of its longstanding branding but also introduced uncertainty among consumers and fans of the series. Since rebranding it to EA Sports FC, the franchise has struggled to maintain the momentum it had enjoyed under the FIFA label. This downturn is particularly notable given that the soccer franchise has historically been a major contributor to EA’s live services revenue, representing a key component of its overall earnings strategy.
In addition to the troubles plaguing its soccer line, EA’s other major franchise, Dragon Age, has also failed to meet performance expectations. With only 1.5 million players reported for the quarter—almost a 50% shortfall from company expectations—this underperformance adds more weight to EA’s fiscal challenges. Despite attempts to bolster player engagement through regular updates and new content, the initial response and ongoing interest have not translated into the anticipated sales or player retention professionals had hoped for.
Despite announcing the challenges, EA CEO Andrew Wilson expressed a commitment to delivering high-quality gaming experiences across all titles. However, the stark reality of declining sales in the Global Football franchise and the disappointing engagement with its new Dragon Age title raises questions about EA’s strategic direction moving forward. As the company approaches its third-quarter earnings call scheduled for February 4, the stakes are high, and stakeholders will be anxiously awaiting further insights into EA’s recovery strategies as they seek to regain the trust and engagement of their player base. The upcoming reporting period is crucial, as it will determine whether EA can pivot away from its current trajectory or if deeper issues within its game development and marketing strategies need addressing.