Wall Street is getting worried social media outrage over EA's 'Star Wars' game may hurt sales 1:29 PM ET Wed, 15 Nov 2017 | 01:00
EA's "Star Wars Battlefront II" officially launches on Friday, but portions of the game went live on Nov. 9 for the company's EA Access and Origin Access subscribers.
The company's shares declined 2.5 percent Friday.
Bank of America Merrill Lynch now predicts the "Star Wars" title sales are likely to disappoint investors and come under the company's target because of the gamer outrage.
"The escalation of EA concessions over the past month are a potential negative indicator of pre-order sales trends and overall unit confidence," analyst Justin Post wrote in a note to clients Friday entitled "In-game purchases benched the night before launch."
The "Star Wars Battlefront II" "bumpy launch week creates incremental risk to early unit sales (initial reviews also underwhelming). … We think unit sales could come in below EA's earlier FY18 outlook for around 14mn units."
Post maintained his buy rating and $137 price target for Electronic Arts shares, representing 23 percent upside to Thursday's close.
The analyst is hopeful upside from the publisher's sports titles will make up for faltering sales results for "Star Wars Battlefront II."
"We think the strength of Ultimate Team could offset a 2-3 million unit shortfall for Battlefront, and remain comfortable with our FY18 estimates," he wrote.
The initial uproar centered on in-game purchases in "Star Wars Battlefront II." They allowed players to save time by paying extra money to accelerate the "unlock" of major characters like Darth Vader.
The gaming community flooded social media and Reddit with thousands of negative posts, saying the company is unfairly compelling consumers to spend more money for content that should be part of the initial $60 game price.
The company had already partly backtracked as it announced Monday it reduced the credits cost to unlock key characters by 75 percent.
Even before the recent social media fight, other analysts were concerned over "Star Wars Battlefront II" prospects.
Jefferies' analyst Timothy O'Shea questioned whether "Star Wars" game buyers will pay more like consumers of EA's popular sports titles.
"If Star Wars can encourage users to spend real money on virtual goods (like FIFA) the game could drive meaningful upside to F'18 and '19 EPS, but this is not a certainty," O'Shea wrote in a note to clients on Nov. 1 entitled "Star Wars Battlefront 2: A Trick Or a Treat?"
The gaming community is still not satisfied even with EA's latest move to pause in-game purchases, calling out the temporary nature of the action.
The battle between gamers and Electronic Arts over microtransactions is far from over.
EA's stock is down 7 percent month to date through Thursday compared with the S&P 500's 0.4 percent gain. The gamemaker's shares are still up 42 percent this year.
The company declined to comment for this story.
Electronic Arts issued a securities filing with the SEC Friday concerning its decision to suspend in-game purchases in "Star Wars Battlefront II."
"This change is not expected to have a material impact on EA's fiscal year 2018 financial guidance," the company said.
PM_ME_UR_TRANSFORmER on November 17th, 2017 at 19:51 UTC »
Remember everyone, the stock market is about the long term gains / losses. The entire market is down today, and EA isn't the only one having a minor loss in stock price.
Losing 1% isn't a big deal in the overall scheme of things, but if a company starts to lose 3 - 4% and continues to gradually decline, that's when EA will need to start taking things seriously.
"Don't get cocky, kid" but do keep up the pressure. Consider it a success when their stock value continues to decline or to remain even.
-MarbleSoda- on November 17th, 2017 at 19:23 UTC »
Honestly if you think your going to see the ramifications of this so quickly, you’re fooling yourself.
We need to protest game after game with the same “pay to win” model. Spread the word as far and wide as you can. Talk to parents who aren’t normally plugged in to this type of news. Talk to your friends who are planning on buying the games. We need to make sure everyone knows about this predatory, money grubbing behavior that has infected the industry. If you want to go further Write to these developers and voice your displeasure.
It’s going to take more than just one game protest to fix this problem. I urge everyone to boycott all EA games. Also be on the lookout for the same P2W model in other upcoming titles. Make sure you research what you’re actually purchasing. Yes you are going to miss out on titles that you really want to play. And yes, it’s going to take some serious self control not to give in. But we speak with our wallets. We hold all the power. It’s up to every individual who cares about this problem to step up and force a change within this industry.
We won a battle. But hunker down fellas, cuz it’ll be a while before we win this war.
Edit: oh my cotton socks! I honestly didn’t expect this comment to get any traction. I’m at work and can’t respond to everyone. Although I would like to say that some people have made really good points and I want to acknowledge them.
I was wrong to say we should boycott all EA games, as not everything EA does is terrible. It would be much more effective to target the specific games with P2W models. That would speak volumes to the developers that we simply won’t stand to be psychologically taken advantage of in such a fashion.
Secondly I would like to add that their are other offenders besides just EA. Rockstar and 2K under TAKE TWO are front runners in P2W as well. This is an industry wide problem and their are many players looking to take advantage of you.
Kardest on November 17th, 2017 at 18:57 UTC »
Quote from ea in the link.
Sad truth, while we are pissed off about the micro transactions in BF2.
This shit is happening in every other title they sell. Battlefront isn't some crazy exception.