EA (Eletronic Arts) Sports logo is seen in this illustration, August 10, 2022. REUTERS/Dado Ruvic/Illustration
(Reuters) -Electronic Arts Inc lowered its annual bookings forecast on Tuesday, as the videogame publisher delayed the release of a title based on the "Star Wars" franchise and consumers dialed back spending in a sagging economy.
The company's shares fell nearly 7% in extended trading as the results added to last week's grim gaming forecast from Xbox maker Microsoft Corp, fanning fears that a downturn in the industry was set to continue this year.
After two years of pandemic-driven growth, the gaming market fell 4.3% in 2022, according to estimates from analytics firm NewZoo. Some of the drop was due to a lack of big new titles.
EA on Tuesday pushed out the launch of "Star Wars Jedi: Survivor" by six weeks to April 28, which would fall into its next fiscal year. The game is a sequel to its 2019 "Star Wars Jedi: Fallen Order" title that has drawn over 20 million players.
The results, meanwhile, showed that recent launches were not doing enough to draw consumers, who are prioritizing essentials in the face of still-high inflation and rising interest rates.
The company, which in recent months released "Need for Speed Unbound" and the latest installment in its "FIFA" series, now expects annual bookings between $7.07 billion and $7.17 billion. It had forecast $7.65 billion to $7.85 billion previously.
Its third-quarter adjusted sales and profit also came in below analysts' expectations, according to Refinitiv data.
"Weak, but not a disaster," Wedbush Securities analyst Michael Pachter said of the results, adding the "Star Wars" title delay led to a "huge shift of earnings" into next year.
"Demand in free-to-play is down a bit, my best guess is that consumers are freaked out by inflation and fears of a recession," he said.
Companies like EA monetize free-to-play games by selling virtual items such as loot boxes and characters to people.
(Reporting by Tiyashi Datta and Aditya Soni in Bengaluru; Editing by Shailesh Kuber)
