EA share dip wipes $3 billion from publisher’s value

The Star Wars Battlefront 2 controversy is hitting EA’s bottom line.

CNBC reports that the company’s share price is down 8.5 per cent so far this month, wiping around $3bn off its value. In contrast, its larger rivals have seen share prices increase, as have the wider markets.

It’s not yet entirely clear how well the game has sold. The game’s UK week one physical sales were down 61 per cent compared to its predecessor, although how much of that is accounted for by the increase in digital buying is unknown. Certainly, though, the game so far remains outside of Amazon.com’s 2017 Top 100 best-selling video games items.

Stifel analyst Drew Crum told investors over the weekend that his firm was “underwhelmed by sell-through for Star Wars: Battlefront II (EA) over the Black Friday weekend”.

However, the site speculates that the largest concern is not necessarily the success of Battlefront 2, but instead the wider implications for EA’s microtransaction strategy in the future.

Cowen’s Doug Creutz said: "Battlefront II is the pointy tip of the iceberg… We think the time has come for the industry to collectively establish a set of standards for microtransactions implementation, both to repair damaged player perceptions and avoid the threat of regulation."

There have certainly been noises from regulators about possible intervention under gambling laws, although the UK Gambling Commission has indicated that this may perhaps be unlikely. Trade bodies such as Ukie, PEGI and the ESRB have also shown little appetite for change.

Indeed, just this weekend, EA CFO Blake Jorgensen was telling a conference audience that EA retains belief in the microtransaction model.

"We’re not giving up on the notion of microtransactions," he said, as reported by Games Industry. "We’re learning and listening to the community in terms of how best to roll that out in the future, and there’s more to come as we learn more. But I would say we’re certainly not changing our strategy.

“We think the strategy of deeply engaging games, keeping the community together, and allowing people to play those games with new content coming via events over time is critical to the future of our business. We feel like we’ve nailed that in the sports games, and we’ll continue to try and find the best model that works in the non-sports games."