Economy2 hours ago (Nov 03, 2021 06:56PM ET)
© Reuters. FILE PHOTO: An Electronic Arts (EA) video game logo is seen at the Electronic Entertainment Expo, or E3, in Los Angeles, California, United States, June 17, 2015. REUTERS/Lucy Nicholson/File Photo
(Reuters) -Electronic Arts Inc and rival Take-Two (NASDAQ:) Interactive Software Inc boosted their 2021 adjusted sales forecasts as gamers remained logged into flagship titles like “FIFA 22” and “Grand Theft Auto V” even as lockdowns wound down.
California-based EA’s shares shot up nearly 3% in extended trading as it also reported an over twofold jump in quarterly adjusted sales, beating expectations thanks to a clutch of strong titles including “Apex Legends” and “Madden NFL 22”.
The company is also banking on the upcoming launch of warfare title “Battlefield 2042”, saying it had seen strong engagement for the game’s beta version.
“We have built a larger and larger audience and a social network around those audiences so that they don’t disappear even if they are going back to work or spending more time outside of their home,” Chief Financial Officer Blake Jorgensen said in an interview.
According to data from analytics firm NPD, U.S. consumer spending on video games rose 2% in the second quarter to $14 billion.
Take-Two raised its annual adjusted sales outlook to between $3.3 billion and $3.4 billion, citing strong demand for its key franchises “Grand Theft Auto V”, “NBA2K” and “Red Dead Redemption 2.”
EA is also considering renaming its top-selling soccer franchise “FIFA” as it reviews a rights agreement with the sport’s international governing body.
A name change of the nearly three-decade franchise might make attracting new players more difficult, analysts say.
“We are taking a pause to decide if he should resign the license or actually rebrand it,” Jorgensen said.
EA forecast full-year adjusted sales of $7.63 billion, compared with $7.40 billion previously. Analysts expected $7.59 billion, according to Refinitiv data.
On the other hand, rival Activision Blizzard (NASDAQ:) on Tuesday forecast quarterly adjusted sales below expectations and put off the launch of two much-awaited titles.
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