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Electronic Arts Doesn’t Have a Bright Outlook for the Holiday Season

November 1, 2016, 8:21 PM UTC
Inside The 2015 E3 Electronic Entertainment Expo
Andrew Wilson, chief executive officer of Electronic Arts Inc. (EA), speaks during an EA event ahead of the E3 Electronic Entertainment Expo in Los Angeles, California, U.S., on Monday, June 15, 2015. E3, a trade show for computer and video games, draws professionals to experience the future of interactive entertainment as well as to see new technologies and never-before-seen products. Photographer: Jonathan Alcorn/Bloomberg via Getty Images
Jonathan Alcorn/Bloomberg via Getty Images

Video-game publisher Electronic Arts’s revenue forecast for the key holiday-shopping quarter was slightly below analysts’ estimates, amid expectations of heavy competition from other games releasing around the same time.

EA forecast adjusted revenue of about $2.04 billion for the current quarter, at the start of which it launched the highly anticipated Battlefield 1 and Titanfall 2 shooter games.

Analysts on average were expecting revenue of $2.08 billion, according to Thomson Reuters (TRI).

EA’s (EA) shares fell 3.5% to $75.10 in extended trading on Tuesday.

Activision Blizzard’s (ATVI) Call of Duty: Infinite Warfare and Ubisoft Entertainment (UBI-SOFT) Watch Dogs 2 have not launched yet, but are expected to launch this quarter.

That may prompt EA to be conservative with its outlook, Wedbush Securities analyst Michael Pachter said in a pre-earnings note.

EA’s adjusted revenue was $1.10 billion in the second quarter ended Sept. 30. Analysts on average were expecting $1.09 billion.

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FIFA 17, the newest version of EA’s top-selling soccer franchise, debuted at the end of September, towards the end of the second quarter, pushing about $75 million in digital revenue to the third quarter.

Sales from EA’s digital business rose 12.7% to about $566 million in the second quarter.

The company said its loss for the period narrowed to $38 million, or 13 cents per share, from $140 million, or 45 cents per share, a year earlier.

Starting from the latest quarter, EA has stopped reporting non-GAAP measures that adjust for deferred revenue, as it has done since fiscal 2008, to comply with stricter guidelines by the U.S. Securities and Exchange Commission.