Electronic arts said today that its results for the fiscal third quarter and for the March 31 fiscal year will be lower than expected due to weaker than expected sales of Dragon Age: Keeper of the Veil and world football matches.
EA stock fell 10.71% to $127.11 in after-hours trading following the announcement.
EA’s initial guidance for fiscal 2025 called for mid-single-digit growth in live service net bookings. However, the company is now forecasting a single-digit decline, with global football accounting for the majority of this change.
Separately, Dragon Age: Veilguard only engaged 1.5 million players during the quarter, a drop of nearly 50% compared to EA’s expectations. Ours Rachel Kaser I loved it.
World football has seen two consecutive financial years of double-digit net bookings growth. However, the franchise saw a slowdown as the initial momentum from the fiscal third quarter failed to carry through to the end. As a result, EA revised its outlook for global soccer to end the fiscal year down single digits, halfway to the new outlook.
As a result, EA is providing preliminary results for its fiscal third quarter and updating its fiscal 2025 net bookings outlook. It now expects net bookings of approximately $2.215 billion for the fiscal third quarter and to an updated range of $7 billion to $7.15 trillion for fiscal 2025. EA had previously forecast $7.5 billion to $7.8 billion.
For its third fiscal quarter, EA now expects GAAP net revenue to be approximately $1.883 billion and approximately $1.11 in GAAP diluted earnings per share.
“During the third quarter, we continued to deliver high-quality games and experiences across our portfolio; However, Dragon Age and EA Sports FC 25 underperformed our net bookings expectations,” said Andrew Wilson, CEO of EA, in a statement. “This month, our teams delivered a comprehensive gameplay refresh in addition to our annual Team of the Year update in FC 25; The positive feedback from players and the first results are encouraging. We remain confident in our long-term strategy and expect a return to growth in FY26 as we execute on our pipeline.
“We continue to balance investments for future growth with operational discipline, and remain committed to EA’s long-term financial framework,” Stuart Canfield, EA’s chief financial officer, said in a statement. “As we look ahead to FY26, we plan to grow as we launch more of our iconic franchises.”
Dragon Age: The Veilguard was released in October on PS5, Xbox Series X/S and PC. And this month, game director Corine Busche confirmed she was leaving BioWare for an offer she couldn’t refuse.
Colin Sebastien, an analyst at Baird Equity Research, said in a note that he expected growth trends to moderate for EA, but not to the extent indicated in today’s advance announcement.
“As per checks, the American football titles appear to be okay, and Dragon Age did not meet expectations (which is not a big surprise given reports of sluggish sales). However, the deterioration in FC is concerning given the stock’s historical resilience and significant contribution to EA’s profitability,” he wrote. “In the near term, industry headwinds will continue and FC issues will fuel further concerns about the resilience of key recurring franchises. The results of Take-Two will be revealing.
Fiscal third-quarter net bookings were about $2.22 billion (-6.5% year-over-year), below Baird’s estimate of $2.49 billion (consensus slightly above 2.51 billion), with a deficit of around $200 million compared to Dragon Age’s FC/$100 million.
Additionally, EA’s revised full-year guidance suggests a decline of approximately $315 million in fiscal fourth-quarter bookings, as trends may not improve from the start of the month. EA now expects around MSD% year-on-year decline in football bookings, compared to positive year-on-year growth previously.
“So, what happens from here?” Hard to say, but we expect EA to increase its support for FC, likely in the form of marketing spend and a more detailed look at pipeline plans for the franchise,” Sébastien wrote. “While this may impact margins, EA could also accelerate efficiency initiatives, such as the increasing use of productivity-enhancing technologies (e.g., GenAI). Additionally, we expect EA to comment on Mass Effect plans, given that the Dragon Age team is reportedly currently working on that title, and Battlefield’s commercial success will now be greater if FC trends don’t rebound not.
While industry trends are still unstable, Sébastien wrote that the second half of 2025 should be better.
“After a tough few years (supply chain issues, fewer blockbuster games, expensive hardware, changing consumer spending, competition for airtime), we still expect a better 2025, starting may -be by the launch of Nintendo’s Switch 2, and assuming key video releases of gaming software and hardware are on time (e.g. GTA VI could be delayed further),” he wrote . “In the short term, the winds “Industry headwinds will likely continue, console hardware requires price cuts and we expect FC trends to fuel further concerns about the resilience of major recurring franchises.”
