FILE PHOTO: An Electronic Arts office is shown in Los Angeles, California, U.S., July 27, 2020. REUTERS/Mike Blake/File Photo
(Reuters) -Videogame publisher Electronic Arts on Wednesday cut its forecast for annual bookings, citing weakness in its established soccer franchise, sparking concerns over a slowdown in the key sports division and sending shares tumbling nearly 11%.
Growth in the "Global Football" business sputtered towards the end of the third quarter, after two consecutive fiscal years of double-digit net bookings increase, the company said.
Dragon Age and EA Sports FC 25 underperformed net bookings expectations in the third quarter, CEO Andrew Wilson said in a statement, revealing sluggish demand for one of the company's most notable and valuable titles.
This is in contrast to a larger trend of gamers with tighter budgets sticking to long-running online games. The EA Sports FC 25 is among the more popular sports titles.
The company estimated fiscal 2025 net bookings in the range of $7 billion to $7.15 billion, down from its earlier forecast of between $7.5 billion and $7.8 billion.
Analysts on average were expecting $7.69 billion, according to data compiled by LSEG.
EA in September 2023 launched its first "FC" soccer game without the FIFA tag, hoping the titles will maintain the momentum in its best-selling franchise after a near three-decade partnership with the world soccer body ended.
The company's shares were last down almost 10% in extended trade, set to erase nearly $4 billion in market valuation at current levels.
Widespread investor worries had also emerged over EA's push into college football eating into the sales of the new Madden title. The company had launched a bundle featuring both games hoping to address the concerns.
"The shortfall is mostly due to the introduction of College Football last summer, which was phenomenally successful, but likely caused some cannibalization of Madden NFL sales," said Wedbush Securities analyst Michael Pachter.
In preliminary results released on Wednesday, EA said it expects third-quarter net bookings of about $2.22 billion, below its earlier expected range of $2.4 billion to $2.55 billion. Analysts on average were expecting $2.51 billion.
EA expects earnings of $1.11 per share, in line with estimates. It had earlier projected earnings per share of between 85 cents and $1.02.
The company will report third-quarter financial results on Feb. 4.
(Reporting by Arsheeya Bajwa in Bengaluru and Juby Babu in Mexico City; Editing by Sriraj Kalluvila)
