Electronic Arts EA was down, courtesy GameStop Corp. GME, as per report from TheStreet. Yesterday, shares of Electronic Arts tumbled 5.5% after GameStop slashed the price of EA’s highly anticipated title Star Wars Battlefront by as much as $20. However, the download version still costs $59.99 at GameStop.
There is no news yet of other retailers like Best Buy making any modification to the $59.99 tag on Battlefront discs.
A few days back, GameStop’s unnerving comments about Battlefront’s lower-than-expected sales caused EA’s stock to fall as much as 4.8%. GameStop added that despite a slow start, the game is likely to get a boost from the upcoming and eagerly awaited release of the movie Star Wars: The Force Awakens on Dec 18. However, this was not enough for harried investors, which perpetrated a selloff in the Electronic Arts stock.
Electronic Arts released its highly anticipated video game Star Wars Battlefront on Nov 17. Battlefront was touted as one of the biggest video game releases of the year. The hysteria surrounding The Force Awakens added to the already hyped release, resulting in strong pre orders.
At its second-quarter fiscal 2016 earnings conference call, Electronic Arts had said that it expects to sell 13 million copies of Battlefront by Mar 2016, up from the earlier projection of 9 to 10 million units. Electronic Arts had struck a 10-year licensing deal with The Walt Disney Company DIS in 2013 for the Battlefront series.
Despite GameStop’s comments about the sluggish sales of Battlefront, EA has maintained its estimates for the same unchanged at 13 million.
Analysts had also pointed out then that GameStop’s comments were driven by “an acceleration of digital downloads" and that Battlefront’s success will largely depend on the sales of its digital version. Analysts were confident that the title will sell over 13 million copies, given the holiday season push and the hype surrounding the release of Force Awakens, the first Star Wars big screen production in a decade.
More recently, the price cut has been touted by an analyst as a pre meditated move by both EA and GameStop to drive retail sales of Battlefront in the holiday season. Dismissing any weakness in the title, he said that the same trend was witnessed for Battlefield 3 and 4. He continues to expect the title to sell 13 million copies.
However, it is to be noted that Battlefront has fallen short of users’ expectations. Though the game is visually stunning, the “lack of options and limited gameplay” are big disappointments. Gamers also find the game “incomplete” and accuse EA of releasing it in a rush so as to benefit from The Force Awakens hysteria.
In addition, the success of Activision Blizzard, Inc.’s ATVI Call Of Duty: Black Ops 3 and Bethesda Softworks’ Fallout 4 might prove deterrents for Battlefront.
Amid such contradictory factors at play, it remains to be seen how Battlefront fares.
At present, EA sports a Zacks Rank #1 (Strong Buy)
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