Battlefield V Sales Vastly Underperform Sending EA Shares Plunging
Electronic Arts may very well have a hit on its hands with Apex Legends, the free-to-play battle royale shooter developed by Respawn Entertainment, but any financial success it generates will have to wait for another day. As it pertains to EA's third fiscal quarter ended December 31, 2018, the numbers are down from what the publisher was expecting, due in part to Battlefield V under performing.
So where exactly did the numbers land? EA shared some preliminary figures showing $1.29 billion in revenue, including $908 million from digital sales and $381 million from packaged goods and "other net revenue." That resulted in a profit of $262 million, or 86 cents per share, compared with loses of $186 million, or 60 cents a share, a year prior.
In a vacuum, those numbers would look impressive. EA does not live in a vacuum, however, and was expecting to rake in significantly more revenue for a much bigger profit—in October, the company had forecast $1.375 billion in revenue. After coming up short, EA's CEO Andrew Wilson called it a "difficult quarter."
"The video game industry continues to grow through a year of intense competition and transformational change," Wilson said. "Q3 was a difficult quarter for Electronic Arts and we did not perform to our expectations. We are now applying the strengths of our company to sharpen our execution and focus on delivering great new games and long-term live services for our players."
EA is hoping Apex Legends will prove a long-term success
Going forward, EA is pinning its hopes on Apex Legends being able to capture the same kind of financial magic as Fortnite. The publisher is also gearing up to launch Anthem, and will continue to lean on its tried-and-true FIFA franchise.
"FIFA stands out as a robust franchise through a tumultuous year in the video game industry," said COO and CFO Blake Jorgensen. "Elsewhere in the business, we’re making adjustments to improve execution and we’re refocusing R&D. Looking forward, we’re delighted to launch Anthem, our new IP, to grow Apex Legends and related Titanfall experiences, to deliver new Plants vs. Zombies and Need for Speed titles, and to add Star Wars Jedi: Fallen Order to our sports titles in the fall."
A for Battlefield V, EA sold 7.3 million units, which is around 1 million less than the publisher was anticipating. Wilson blamed the shortfall on the decision to focus on single player action instead of a battle royale mode. He also pointed to the game's holiday launch.
"We made the decision to prioritize other features, including a single player experience at launch, over a battle royale mode," Wilson said. "Unfortunately, the later release date meant the game launched deeper into a competitive holiday window where heavy price discounting was a big factor."
EA is expected to add a battle royale mode to Battlefield V sometime in the future, though depending on how successful Apex Legends ends up being, it might not have a big impact on sales. Investors are certainly being cautious—EA's share price is down more than 13 percent this morning.