Electronic Arts call: 'Battlefield' letdown, but strong slate elsewhere
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Electronic Arts (EA) has pared its postmarket decline following a miss on bookings in its fiscal Q3 earnings, now down just 0.5% as the company's conference call wraps up.
Net bookings rose 7.5% to a record $2.58 billion, but missed by about 3% and the company acknowledged a high-profile holiday launch fell short of its hopes.
CEO Andrew Wilson wasted no time on the call highlighting disappointment with a launch of Battlefield 2042 that "did not meet expectations."
Developing such a major title largely in a work-from-home environment for nearly two years "proved to be challenging," Wilson says, noting the discovery of unanticipated performance issues the company would need to address. And "some design choices did not resonate" with the community as well, he says.
The company's "fully committed" to the Battlefield community and Wilson says it's already implemented major changes, including shifting the new season of live services to early summer 2022.
Pressed by analysts for some hard unit numbers, EA declined to elaborate, and pointed out that Battlefield is around just 10% of revenue. But "clearly we sold less units than we thought we would."
The third quarter demonstrated the strength of the live-services portfolio, says outgoing Chief Financial Officer Blake Jorgensen. (EA has tapped Microsoft's Chris Suh to take over the CFO role.)
That live services success ensured only a narrow miss of expectations despite the Battlefield 2042 disappointment, he says.
"FIFA goes from strength to strength, Apex Legends continues to impress," Jorgensen says. Battlefield disappointed but EA's broad-portfolio approach "insulates us from any one title."
He also reminds that the FIFA launch was moved earlier this year, into the fiscal second quarter - so, viewed in that context, the "strength of the business" in fiscal Q3 is more apparent.
In other details, digital made up 64% of full-game sell-through, up 2 percentage points from last year, Jorgensen says.
Meanwhile, turning to mobile, Wilson says the company is taking the advertising stack it acquired in the Glu Mobile deal and applying it across its mobile portfolio. It's too soon to know what that will mean in terms of figures, though. And Jorgensen says an Apex Legends mobile game is on its way (along with a separate Chinese build) though the timing is uncertain.
The company also recently noted it's begun work on three new Star Wars videogames, including a new first-person shooter.