Shares of “big three” game publisher Electronic Arts (EA) were sliding after the video game giant cut its net bookings guidance for fiscal 2019, driven by the delay of the launch date for its upcoming World War 2 shooter “Battlefield V.”
WHAT’S NEW: EA announced this morning that it moved the launch date for “Battlefield V” from October 19 to November 20. Oskar Gabrielson, general manager of the game’s developer DICE, said that the company expects to see feedback from the game’s upcoming Open Beta and that this was the reason for moving the launch date. Gabrielson added that the development team will “take the time to continue to make some final adjustments to core gameplay, and to ensure we really deliver on the potential of Tides of War.” The Fly notes that the original rollout date of October 19 was a week after the release of Activision Blizzard’s (ATVI) “Call of Duty: Black Ops 4” and a week before the launch of Take-Two’s (TTWO) “Red Dead Redemption 2.”
REVISED GUIDANCE: Electronic Arts said that, as a result of the updated launch date for “Battlefield V,” it has revised its fiscal 2019 outlook. The company cut its FY19 view for net bookings, its adjusted revenue metric, to $5.2B from $5.55B, noting that roughly $115M of this change is driven by the movement in foreign exchange rates. Analysts expect EA to report FY19 revenue of $5.59B. In addition, the publisher maintained its guidance for the second quarter, expecting Q2 earnings per share of roughly 48c on revenue of $1.27B.
ANALYST OPINION: Following the news, KeyBanc analyst Evan Wingren said in a research note that he estimates that the guidance cut as well as “likely a worse-than-expected showing from mobile titles” could have a 35c impact to EPS if all else is equal. Wingren added that he views the “Battlefield V” delay as positive for Activision Blizzard and Take-Two and their new game launches, as it moves a large competitor away from their release window. The analyst maintained an Overweight rating on all of the “big three” video game publishers.
