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The Challenges for Electronic Arts in Fiscal 2018 and Beyond

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PR issues

Previously in this series, we saw how US-based (SPY) gaming company Electronic Arts (EA) is grappling with dissatisfied players related to micro-transactions in its Star Wars Battlefront II game. 

Players were unhappy when asked to pay a premium to gain additional access to gaming features. While this public relations issue is expected to be resolved, EA could be impacted by lower sales in fiscal 2018.

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Gaming releases

Electronic Arts has no major gaming franchises that are scheduled to be launched in the next few months. Analysts expect EA to post a YoY (year-over-year) revenue decline for fiscal 3Q18—the holiday quarter of 2017. 

The next big game is scheduled to be Anthem, which was expected to be launched in the holiday season of 2018. However, that debut was postponed to 2019.

Disappointing debut for Star Wars Battlefront II in the UK

Star Wars Battlefront II has seen significantly lower-than-expected sales in the United Kingdom (EWU) after it launched in November 2017. Retailers in the UK had expected sales for the new Star Wars game to exceed that of Battlefield I

However, sales in the first week were 50% less than sales for Star Wars Battlefield and more than 60% lower than sales of Star Wars Battlefront, which was released in 2015.

Gaming research firm Newzoo expects the global games market to touch $116.0 billion in 2017, up from $104.8 billion in 2016. Revenues from global gaming are expected to reach $143.5 billion by 2020. However, EA’s revenues are expected to rise at a slower pace compared to the global average.

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