Electronic Arts Falls on ‘Battlefield’ GlitchesCliff Edwards
Electronic Arts Inc., the second-largest U.S. video-game maker, fell the most in three weeks after technical problems with its recently released “Battlefield 4” raised concerns about the title’s future.
Electronic Arts, based in Redwood City, California, declined 6 percent to $21.01 at the close in New York, for the biggest one-day fall since Nov. 15. The drop today pared the stock’s gain this year to 45 percent.
Dice, the developer of “Battlefield 4,” is temporarily halting work on other projects until it fixes problems with online add-ons to the game, John Reseburg, a spokesman for Electronic Arts, said in an e-mail today. Users reported malfunctions with updates and game ejections on consoles, the online video-game site IGN Entertainment reported yesterday.
The glitches with the game, released on Oct. 29, lessen the value of the “Battlefield” franchise and could make it harder for Electronic Arts to compete with Activision Blizzard Inc.’s rival “Call of Duty” title in the future, Evan Wilson, an analyst with Pacific Crest Securities Inc., wrote in a note. Sales of “Battlefield” titles and sports games represent about half of the company’s annual sales.
“We know we still have a ways to go with fixing the game; it is absolutely our No. 1 priority,” Reseburg said in the statement.
Issues with the online components of the title add to analyst concerns about sales of the $60 game, which was discounted over the Thanksgiving shopping weekend, and whether it may hurt Electronic Arts’ financial results.
“The server issues further exacerbate this and create a risk to full-year estimates,” Arvind Bhatia, an analyst at Sterne Agee & Leach Inc., wrote in a research note. Bhatia has a buy rating on the stock.
The next installment of the game also could be delayed while the developer works out its current issues, said Wilson, who has the equivalent of a hold on the shares.
While the glitches with the title are “disappointing,” they are unlikely to have any lasting impact as Electronic Arts has multiple teams working on ‘Battlefield’ titles, said Michael Olson, an analyst with Piper Jaffray Cos.
“EA is projecting the message that they will do everything possible to get the issues fixed quickly, but this does not literally mean developers are being pulled from other projects,” said Olson, who has an overweight rating on the shares, the equivalent of buy.