The backlash over Star Wars Battlefront II’s predatory microtransactions is taking its toll on EA financially.
EA’s shareholders are not happy. Not only is Star Wars Battlefront II not performing properly, but EA’s entire microtransaction business model could be in jeopardy. The ‘Ultimate Team’ model EA CEO Andrew Wilson first made popular years ago is what’s making the company most of it’s money today, but that may all go down the drain. It’s integration into Star Wars Battlefront II caused a huge uproar among fans, and it’s finally starting to effect the company’s stock value.
As reported by CNBC, EA’s stock has plummeted 8.5 percent month to date through Tuesday, wiping out $3.1 billion of shareholder value. Comparatively, major competitors Take-Two Interactive and Activision Blizzard saw increases in their shareholder value. The controversy has likely spooked investors because gamers aren’t running out and picking up the game. Sales for the game in the UK are down over 60 percent compared to Star Wars Battlefront (2015), and the game has yet to claim the top spot from Activision’s Call of Duty: WWII. Most distressing, however, is that the game likely didn’t perform that well during the crucial Black Friday weekend. According to Stifel analyst Drew Crum, sell-through for Star Wars Battlefront II was underwhelming.
However, the biggest problem for EA is only just surfacing. Politicians around the world are now eyeing legislation targeting microtransactions. Hawaii, Belgium, France, China, and Australia are all looking into Loot Boxes, and more may join them. Considering EA relies so heavily on microtransactions, legislation limiting it could damage their business.
“Battlefront II is the pointy tip of the iceberg. … The biggest recent controversy has centered around EA’s Star Wars Battlefront II, where early evidence suggests player anger over a mishandled loot box economy may in fact be impacting initial sales,” Cowen’s Doug Creutz wrote in a note to clients Monday. “We think the time has come for the industry to collectively establish a set of standards for MTX implementation, both to repair damaged player perceptions and avoid the threat of regulation.”
Of course, this is a self-inflicted wound. EA’s greedy business practices have gone too far, and it was only a matter of time before gamers snapped. EA has already confirmed that microtransactions will be making their way back to Star Wars Battlefront II, which will likely cause another uproar. At this point, it is time for EA to cut it out with the microtransactions and get back to earning player’s trusts by making quality games across various genres. Players have made it clear that not every game should follow the “games-as-a-service” model that Andrew Wilson is so fond of.
