In after-hours trading on 31 January 2023, shares in EA saw a sudden plummet of more than 10 percent following confirmation of two games being cancelled on mobile and the delay of a third title.
Following on from this, shares fell by 14 percent on 1 February in an intraday low. The day ended down by 9.3 percent – the company’s biggest drop in one day since before the pandemic.
In fact, it was EA’s largest percentage drop for a single day since February 2019.
Peaks and troughs
This is the latest in a sharp turnaround from EA’s positive news last year, such as Q2 earnings up to 30 September 2022 being $1.9 billion – an increase from $1.8 billion the year prior – and ranking among the top 10 games companies by revenue. 2022 was also the year EA overturned a $10 million fine for its use of lootboxes.
This week’s share fall does track with recent announcements though, such as the reveal that Apex Legends Mobile and Battlefield Mobile have been cancelled. Apex Legends launched on mobile less than a year ago, with the reason for cancellation being that it "was not going to meet the expectations of our players". While still accessible for now, it is due to be shut down at the start of May.
"The performance of…the 'Apex' franchise was below the levels we had anticipated, reflecting the challenging market dynamics," said EA chief financial officer Chris Suh, as reported by MarketWatch.
A spokesperson for EA has also reportedly confirmed that cuts at the company will affect workers on Battlefield, but there is a mission to redeploy as many employees as possible to other projects.
EA’s delaying of Star Wars Jedi: Survivor by six weeks – from March to late April – has perhaps also been a factor in the drop in shares; this delay pushes the Star Wars title from EA’s fourth quarter into the next fiscal year, which has had an impact on the company’s fourth-quarter guidance.
"Excluding the impact of [foreign-exchange rates], we expect mid single-digit growth on net bookings and low double-digit growth in profitability."
It was only a few months ago that praises were being sung over Apex Legends Mobile, with the game winning the Google Play Award for Best Overall Game of 2022.