Electronic Arts (EA) admitted in their Q3 financial report that their console shooter Battlefield V did not meet earnings expectations.
EA’s third quarter revenue was $1.3 billion. That was up from last year’s $1.2 billion, but it failed to meet EA’s expectations by $86 million.
CEO Andrew Wilson addressed the poor performance:
“The video game industry continues to grow through a year of intense competition and transformational change. Q3 was a difficult quarter for ElectronicArts and we did not perform to our expectations. We are now applying the strengths of our company to sharpen our execution and focus on delivering great new games and long-term live services for our players. We’re very excited about Apex Legends, the upcoming launch of Anthem, and a deep line-up of new experiences that we’ll bring to our global communities next fiscal year.”
The Hollywood Reporter (THR) notes Wilson specifically pointed to Battlefield V on an earnings call where he discussed the game was delayed and “moved it into a competitive holiday market.” THR reports that Battlefield V only sold “half the number of physical copies of its predecessor, Battlefield 1.”
THR would also report that Wilson blamed the popularity of Battle Royale style games like Fortnite, “He also noted that the popularity of Battle Royale games hurt the game’s performance.”
Wilson would go into more detail about the specific failures of Battlefield V in an earnings call as reported by Variety:
“If I think about ‘Battlefield 5’ more holistically, I think we did not do a great job of building momentum early in the project. And I think about this not just in the context of development but I think about this in the context about broader execution against the entire campaign. Our launch didn’t resonate strongly as we would have liked it to with players and we were never truly able to catch-up and as our competitors continued to build momentum whether that was ‘Fortnite’ or ‘Red Dead Redemption 2’ or ‘Call of Duty.”
“A combination of a poor start in our marketing campaign together with what I think was a longer development cycle that put us into a more competitive window and the amplification that competitive window against some of those underperformance factors is how we resulted in ‘Battlefield.”
Bloomberg notes that EA’s Chief Financial Officer Blake Jorgensen not only blamed Fortnite, but competition from Red Dead Redemption 2 for the failure of Battlefield V. “It’s always a battle, for time more than a battle for money,” Jorgensen said.
Bloomberg was very pessimistic on EA indicating that their net revenue “is down 15 percent to $1.55 billion in the 12 months that ended in December.” They also indicated that EA shares fell to “as low as $74.71 in late trading after the results were released.” EA’s stock had been up 17% for the year.
This should come as no surprise to our readers who have been following EA’s debacle with Battlefield V over the past year. Their troubles began when many fans didn’t take to the game’s trailer when it debuted at E3. Many fans took issue with Battlefield V’s steampunk aesthetic in a game that was supposed to take place during World War II.
Following the negative fan reaction, EA’s then Chief Creative Officer Patrick Soderlund made the situation even worse by telling fans to not buy the game if they didn’t like it:
“And we don’t take any flak. We stand up for the cause, because I think those people who don’t understand it, well, you have two choices: either accept it or don’t buy the game. I’m fine with either or. It’s just not ok.”
He also referred to them as “uneducated.”
“These are people who are uneducated—they don’t understand that this is a plausible scenario, and listen: this is a game. And today gaming is gender-diverse, like it hasn’t been before. There are a lot of female people who want to play, and male players who want to play as a badass [woman].”
The situation didn’t improve from there. After reports of poor pre-sales, EA decided to delay the game to November 20th. It was originally scheduled to release on October 19th. Soderlund would also exit the company in August.
When the game finally did launch, EA decided to once again target their potential customers. This time mocking them at a launch party. EA put up a graphic that read #EveryonesBattlefield. The words were surrounded by a number of comments directed at EA by their own fans following the release of the trailer. It was an obvious jab at unhappy gamers.
Despite the poor earnings during the third quarter, CFO Blake Jorgensen was optimistic moving forward:
“Elsewhere in the business, we’re making adjustments to improve execution and we’re refocusing R&D. Looking forward, we’re delighted to launch Anthem, our new IP, to grow Apex Legends and related Titanfall experiences, to deliver new Plants vs. Zombies and Need for Speed titles, and to add Star Wars Jedi: Fallen Order to our sports titles in the fall.”
What can EA, and other AAA publishers learn from Battlefield V and the way they treat their fans? It seems very simple to me. If you tell your customers not to buy your product, they just might follow your advice. It wasn’t a good move to lash out at the poeple who want to buy your product.
Wilson made it clear on the earnings call that EA has made significant changes. He indicated they’ve created a formal process to identify a game’s creative center. They are calling it “reason to play.” EA also restructured their entire approach to marketing. One of the things they’ve added is a “creative council” that is expected to improve their “creative decision making.” Wilson added:
“You should expect that we will be more innovative and more creative around both marketing campaigns and how we bring games to market and more diligent in our operation against execution of the project plans around development of video games going forward. I mean, it’s something we are taking very seriously across the full landscape of development.”
What do you think? Do you think EA will change their behavior when it comes to dealing with their fans and customers? Do you think they will make any changes following this poor performance report?