Analyst cuts EA profit estimate due to poor Star Wars Battlefront 2 sales

By James Billcliffe, Wednesday, 13 December 2017 09:19 GMT

Bank of America Merrill Lynch has reduced its price target and profit estimate for EA following poor sales of Star Wars Battlefront 2.

This comes after a sustained backlash against the company for its implementation of microtransactions in Battlefront 2, as well as the closure of Visceral Games – who were working on an untitled single-player Star Wars game.

Justin Post, Wall Street Analyst at Merrill Lynch – in a note to clients reported by CNBC – predicted that Battlefront 2 would undershoot its expected 14 million sales by around 2.5 million and lowered his 2018 fiscal earnings-per-share estimates from $4.28 to $4.22.

According to NPD sales data, Battlefront 2’s figures for November – which included the important Black Friday shopping weekend – were down 52% on the first Star Wars Battlefront. Unsurprising, given the amount of Reddit posts on the day highlighting shelves stripped of everything but Battlefront 2. In the UK, physical sales for the title during its release window were down 61%.

EA have since temporarily turned off the real-money microtransactions in Battlefront 2, and have been cagey about when they will return, if at all.

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“Clearly we are very focused on listening to the consumer and understanding what the consumer wants and that’s evolving constantly,” said Blake Jorgensen, EA CFO, via Glixel.

“But we’re working on improving the progression system. We turned the MTX [microtransactions] off as an opportunity to work on the progression system inside the game. We’re continuing to do that. I think there’s an update this week and again next week.

“Over time, we’ll address how we will want to bring the MTX either into the game or not and what form we will decide to bring it into.”

This is only expected to be a short-term issue for EA however, with analysts also forecasting a stronger 2018.

“As controversy subsides post-holidays, we expect investor interest to pick up ahead of a stronger FY19 title slate, renewed digital optimism, and operating leverage potential,” Post added.

“Battlefront MTX relaunch and FIFA World Cup content launch are key 1H events.”

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