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Will Electronic Arts’ Waffling Torpedo Star Wars Battlefront’s Revenue?

After the Thursday announcement that it would suspend microtransactions in its highly anticipated game Star Wars Battlefront II, stock in game publisher Electronic Arts dropped by 2.5 points. Analysts are mixed on the decision’s impact on the game and company’s financial outlook.

EA’s reversal came after a sustained firestorm of criticism over a “loot crate” system that asked players to spend beyond the game’s $60 retail price to unlock characters and significant gameplay advantages, which many critics said fundamentally undermined the game experience. The system was also criticized as a form of gambling that could be detrimental to the game’s younger players.

The suspension of the system, which EA’s DICE development unit says it will retool and eventually relaunch, may have prevented a long-term black eye for the company among game buyers. But analysts have been split on whether the situation demands a wholesale reconsideration of Battlefront’s financial prospects. A Bank of America Merrill Lynch analyst wrote that controversy surrounding the game could lead to sales 2-3 million units below previous projections of 14 million.

The move also cuts off — again, temporarily — a stream of recurring revenue that would almost certainly have been massive: while a vocal segment of gamers and critics love to lambaste them, in-game purchases have been successful in games like Blizzard’s Hearthstone, Bungie’s Destiny 2, and EA’s own FIFA soccer games. In fiscal 2017, EA pulled in a staggering $1.68 billion from microtransactions in its existing titles, and Battlefront in-game sales might have been expected to rival or exceed the $650 million generated by FIFA alone. FIFA’s microtransaction system is similar to the one pulled from Battlefront, providing gameplay advantages rather than merely cosmetic perks. According to Eurogamer, FIFA has generated less controversy because its player base is more casual and older.

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Other games industry observers have been more positive, though. Speaking to Gamesindustry.biz, an analyst for gaming research firm SuperData called the reversal “the smart move.” An analyst with IHSMarkit also said that EA’s decision “defuses the situation” ahead of holiday sales, with “relatively limited” overall financial impact.

That take was largely supported by online reactions to EA’s announcement. On Twitter, many fans gave EA at least cautious kudos for listening to their concerns.

 

 

There’s still a lot of uncertainty, though – no details have emerged of exactly how the game’s microtransactions will work after they’re revamped and reinstated. At least some commenters had little faith that EA would fully reverse what has been called the “pay to win” effects of in-game purchases. But if the eventual revamp of Battlefront‘s microtransactions provides fewer gameplay advantages, players will spend correspondingly less. That puts the game’s designers between a rock and a hard place.