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Star Wars Battlefront II disappoints with over 7 million sold

Anthem delayed to 2019 to give it more space from next Battlefield game, holiday competition; Respawn Star Wars game to launch by April 2020

Star Wars Battlefront II hasn't lived up to Electronic Arts' expectations. In an investor conference call today, Electronic Arts CFO Blake Jorgensen pinned the company's lower-than-expected bookings on the performance of the Star Wars shooter sequel.

"For Q3, we had expected to sell about 8 million units, but we fell short of that by less than 1 million units," Jorgensen said.

That would put Battlefront II sales just above 7 million units. Prior to the game's launch, some analysts had been expecting 14 million copies sold for EA's current fiscal year, when ends March 31.

Part of the reason for the disappointing sales could have been the negative response to the game's use of microtransactions. Player feedback was a key reason why EA decided to pull the microtransactions in Battlefront II on the eve of its official release. Although there are plans to reinstate some premium content in the next few months, the company said that they do not want to divide the user base.

EA's biggest game of the holidays falling short of expectations played a role in the company posting a $186 million loss in the quarter, but the numbers were also lowered by recent US tax reform. The Tax Cuts and Jobs Act, which was signed into law in December 2017, resulted in a preliminary $176 million charge for the company, including a tax on accumulated overseas profits. However, Jorgensen did say the company now has an opportunity to repatriate most of its foreign earnings.

As for EA's upcoming lineup, the still-untitled Star Wars action game from the recently purchased Respawn Entertainment has a tentative release window for EA's fiscal 2020 (which runs April 2019 to March 2020).

Executives also confirmed that Anthem, the upcoming multiplayer role-playing shooter from Bioware, is now coming in early 2019 instead of fall 2018 like was originally announced.

"Regardless of how it's been portrayed, we're not looking at that as a delay in the game," Wilson said. "We've chosen to launch Anthem in Q4 [fiscal 2019] and the date is really determined by portfolio balancing considerations, not for product readiness reasons."

Wilson added, "We're really excited by the way the next Battlefield is shaping up and it probably doesn't make sense to launch Anthem right up next to it. And when you think about Anthem as a brand new IP, it also makes sense to give it it's own launch window so that we can give it the focus and attention it deserves and give it some free air."

Digital sales continue to be a growing part of EA's business. 37% of the sales of full games last year were from the digital marketplace, which Jorgensen said is slightly behind the 40% for the rest of the industry. Reasons given for the shortfall include FIFA's popularity in markets that may not have transitioned as sharply toward digital, and Battlefront II's popularity as a gift, combined with a younger-skewing player base. (Jorgensen said Battlefront II's digital sales accounted for fewer than 30% of copies sold.)

During the QA portion of today's phone call, an investor asked how EA Originals, Electronic Arts' program to publish independent games, would impact the company's bottom line. Wilson stressed that games such as A Way Out and Fe will have a nominal impact on their revenue, and any profits go back to the development team. Rather than using Originals as another pillar for the company's continued growth, the games instead are ways for smaller creators to explore ideas that aren't found in games with bigger budgets.

"It's built on a philosophical belief that we need to encourage all forms of game development to keep the industry healthy over time," Wilson explained.

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