EA Faces Setback as Soccer Title Falters, Leading to Lower 2025 Bookings Forecast
- tech360.tv
- Jan 23, 2025
- 2 min read
Videogame giant Electronic Arts (EA) has revised its projections for annual bookings in 2025, attributing the adjustment to challenges within its popular soccer franchise. The company's shares plummeted by nearly 11% following concerns about a slowdown in its key sports division.
The growth in EA's "Global Football" business decelerated towards the end of the third quarter, marking a departure from the double-digit net bookings increase seen in the previous fiscal years. CEO Andrew Wilson highlighted underperformance in titles like Dragon Age and EA Sports FC 25, indicating subdued demand for these significant offerings.
Despite a prevailing trend of gamers gravitating towards enduring online games due to budget constraints, EA Sports FC 25 remains a favoured sports title. The company now anticipates fiscal 2025 net bookings to range between $7 billion and $7.15 billion, a reduction from the initial forecast of $7.5 billion to $7.8 billion.
The launch of EA's first "FC" soccer game in September 2023, sans the FIFA branding, aimed to sustain the momentum of its top-selling franchise post the conclusion of a lengthy partnership with the global soccer governing body. However, the company's shares dipped by almost 10% in after-hours trading, potentially wiping out close to $4 billion in market value.
Investor concerns have also surfaced regarding EA's foray into college football impacting the sales of the new Madden title. In response, the company introduced a bundle featuring both games to address these apprehensions. Analyst Michael Pachter from Wedbush Securities noted that the shortfall could be attributed to the success of College Football last summer, which may have cannibalised Madden NFL sales.
In its preliminary results, EA disclosed an expected third-quarter net bookings figure of approximately $2.22 billion, falling short of the earlier projected range of $2.4 billion to $2.55 billion. The company foresees earnings of $1.11 per share, aligning with estimates, compared to the initial forecast of earnings per share ranging from 85 cents to $1.02.
EA is scheduled to unveil its third-quarter financial results on February 4, shedding light on the impact of these developments on its overall performance.
EA revises 2025 bookings forecast downwards due to challenges in its soccer franchise.
Shares drop by nearly 11% following concerns about a slowdown in the sports division.
Introduction of College Football seen as a factor in lower-than-expected sales of Madden title.
Source: REUTERS
