Wall Street is freaking out as EA caves again to social media outrage over its ‘Star Wars’ game
Published 7 Hours Ago Updated 40 Mins AgoCNBC.com
Wall Street is freaking out as EA caves again to social media outrage over its 'Star Wars' game 40 Mins Ago | 00:50
Angry gamers are winning the war against Electronic Arts' in-game money-making strategy in its new "Star Wars Battlefront II" title.
Wall Street is taking notice and lowering its expectations for the video game's financial prospects.
The company announced Thursday it is temporarily turning off all in-game purchases in "Star Wars Battlefront II" in response to the negative sentiment from the gaming community.
View image on Twitter
https://twitter.com/EAStarWars/status/931332890717143040
EAStarWars
✔@EAStarWars
Today, we turned off in-game purchases for #StarWarsBattlefrontII. The game is built on your input, and it will continue to evolve and grow. Read the full update: http://bit.ly/2hyFHce
8:27 PM - Nov 16, 2017
Twitter Ads info and privacy
"It's clear that many of you feel there are still challenges in the design. We've heard the concerns about potentially giving players unfair advantages. … Sorry we didn't get this right," EA wrote in the post. "We hear you loud and clear, so we're turning off all in-game purchases. … The ability to purchase crystals in-game will become available at a later date, only after we've made changes to the game."
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.
- Investors are now worried the controversy over Electronic Arts' "Star Wars Battlefront II" in-game monetization model will hurt the video game's sales.
- "The escalation of EA concessions over the past month are a potential negative indicator of pre-order sales trends and overall unit confidence," Bank of America Merrill Lynch analyst Justin Post writes."
- EA's stock is down 7 percent month to date through Thursday compared with the S&P 500's 0.4 percent gain.
Published 7 Hours Ago Updated 40 Mins AgoCNBC.com
Wall Street is freaking out as EA caves again to social media outrage over its 'Star Wars' game 40 Mins Ago | 00:50
Angry gamers are winning the war against Electronic Arts' in-game money-making strategy in its new "Star Wars Battlefront II" title.
Wall Street is taking notice and lowering its expectations for the video game's financial prospects.
The company announced Thursday it is temporarily turning off all in-game purchases in "Star Wars Battlefront II" in response to the negative sentiment from the gaming community.
View image on Twitter
https://twitter.com/EAStarWars/status/931332890717143040
EAStarWars ✔@EAStarWars
Today, we turned off in-game purchases for #StarWarsBattlefrontII. The game is built on your input, and it will continue to evolve and grow. Read the full update: http://bit.ly/2hyFHce
8:27 PM - Nov 16, 2017
Twitter Ads info and privacy
"It's clear that many of you feel there are still challenges in the design. We've heard the concerns about potentially giving players unfair advantages. … Sorry we didn't get this right," EA wrote in the post. "We hear you loud and clear, so we're turning off all in-game purchases. … The ability to purchase crystals in-game will become available at a later date, only after we've made changes to the game."
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.
