EA Faces ‘Day of Reckoning,’ Loses $3 Billion in Stock

As reported by CNBC, Electronic Arts shareholders are applying distance between themselves and the company, which has resulted in EA seeing a drop in stock by 8.5 percent, the equivalent of 3.1 billion dollars of shareholder revenue. The stock had been in a steady decline for a few months prior, though it still remains valued at nearly $25 more than it was one year ago.

While many gamers are celebrating this financial setback as a victory, it is important to realize that it is unlikely the shareholders are sympathizing with the emotions or outrage of the gaming community. It’s more likely that the shutting down of microtransactions within the online ecosystem of Star Wars Battlefront II has made the project suddenly and significantly less profitable than shareholders had initially anticipated it being. While many boycotted the game by refusing purchase, CNBC regards the dilution of sales as EA’s secondary issue.

Although, while it may be the actions of the gaming community that resulted in the loss, it is not sympathy to their cause that inspired it, at least on the part of the investors. This loss in profit was, ironically enough.

EA’s reckoning has arrived. They must now decide what they will do with microtransactions and its general platforms of service moving forward. The pushback the company has received from both the gaming community and outside forces has dictated that EA is required to rethink and then rework its business model.

The controversy has now reached state politicians and Wall Street analysts – all of whom are pressing EA and other developers to “collectively establish a set of standards for MTX[microtransaction] implementation, both to repair damaged player perceptions and avoid the threat of regulation,” as spoken by Doug Creutz, analyst for the diversified financial services firm COWEN.

EA for its part has remained secure in – and potentially even oblivious to – its positioning.  The company’s Chief Finanical Officer and Executive Vice President, Blake Jorgensen, expressed his take on the issue at hand.

“We’re not giving up on the notion of MTX. We’re really watching how people are playing the game. We’re trying to understand are there certain modes where MTX may be more interesting than not?

We’re learning and listening to the community to decide how best to roll that out in the future.”

Published by Sean Price

Plays on PC, PS4, and 3DS. Fan of tactical role-playing games and games with a strong narrative. Is excited to witness the way the medium evolves as a method for telling stories, and for interacting with other people.