ALL THE LATEST NEWS ABOUT THE BUSINESS OF PC GAMES

News

$3bn wiped off EA's valuation following share dip

$3bn wiped off EA's valuation following share dip

All is not well at publishing giant EA.

As reported by CNBC, $3bn has been knocked off the company's valuation, representing an 8.5 per cent share price decline over the last month. This follows a wealth of controversy and poor decisions during to the implementation of loot boxes within Star Wars Battlefront II.

Due to their aggressive nature, the loot crates instigated a consumer backlashˆ that appears to have hurt the game's sales. EA has since removed them from the game, temporarily

Stifel analyst Drew Crum wrote: "We were underwhelmed by sell-through for Star Wars: Battlefront II (EA) over the Black Friday weekend, which follows a controversial launch for the game."

It has even got political forces involved. Belgium insists that loot crates are gambling, while the Netherlands and UK gambling commissions are investigating. Meanwhile, Hawaii wants legislation introduced to control loot boxes in video games.

In what we imagine to be some *very* awkward conversations, Disney and LucasFilm have had to weigh in on the issue, which surely can't be good for EA's relationship with the licensors.

Even analysts at Wall Street are calling for some kind of regulation for how microtransactions are implemented in video games.

"Battlefront II is the pointy tip of the iceberg. … The biggest recent controversy has centered around EA's Star Wars Battlefront II, where early evidence suggests player anger over a mishandled loot box economy may in fact be impacting initial sales," Cowen's Doug Creutz said.

"We think the time has come for the industry to collectively establish a set of standards for MTX implementation, both to repair damaged player perceptions and avoid the threat of regulation."

EA says it is not moving away from microtransactions in its games, but rather is evaluating how they can best be implemented


Editor - PC Games Insider

Alex Calvin launched PCGamesInsider.biz in August 2017 and has been its editor since. Prior to this, he was deputy editor at UK based games trade paper MCV and content editor for marketing and events for London Games Festival 2017. His work has also appeared in Eurogamer, The Observer, Kotaku UK, Esquire UK and Develop.

Comments

No comments
View options
  • Order by latest to oldest
  • Order by oldest to latest
  • Show all replies