Cowen: EA’s Bottom Line hit by Star Wars Battlefront II Outrage

The Cowen Analyst Group has weighed in again on the Star Wars Battlefront II microtransaction controversy, and things aren’t looking to rosy for EA.

To say EA has been struggling to get players on board with Star Wars Battlefront II would be an understatement. Players were, and still are, furious with the company over it’s gross handling of the Star Wars license. The game based it’s entire progression system around Loot Boxes and microtransactions, locked key characters behind impossibly high paywalls, and made incendiary comments towards the community. Disney eventually butted in and forced EA to remove all microtransactions for the time being, but the damage was done. The game vastly underperfomed during it’s launch month, and things aren’t likely to improve.

Cowen analyst Doug Creutz penned a report titled “Cutting numbers on problematic ‘SWBF2’ performance.” In it, he noted that the firm would be reducing its price target and profit forecasts for Electronic Arts shares. Most importantly, he noted that the increasing anger over microtransactions could prove problematic for EA going forward due to their heavy reliance on them (i.e. FIFA Ultimate Team).

“The negative player reaction to the mishandled loot box economy has clearly impacted SWBF2 sales … we think this is evidence that the industry’s core gamer constituency is getting increasingly unhappy about the degree to which MTX is being shoehorned into core gameplay loops,” Creutz wrote.

His new target price for EA shares is $104, down from $106. Meanwhile he now expects Star Wars Battlefront II sales to end up somewhere around 11 million units instead of 14 million units. This would put the game’s sales significantly behind the 2015 original, even when factoring in digital sales. EA’s other holiday release, Need for Speed: Payback, also isn’t doing too well.

“Even factoring in the shift to digital units, it seems pretty likely that initial total sales will wind up being 20%-30% behind the pace of the original Battlefront, with bigger-than-normal price cuts also likely needed to move inventory,” he wrote. “We think that the poorly-reviewed Need for Speed: Payback is probably underperforming as well.”

 

While these numbers may not seem like much, this is a big deal. Gamers are fighting back against shoehorned microtransactions in games, and it’s finally having an effect on EA’s bottom line. Hopefully, this will mark a change in how publishers attempt to monetize their games, because gamers have proven here that they will fight back.

Thanks, CNBC!