EA's share price is still up on the year, but the Battlefront mess has taken a toll.
Electronic Arts' exclusive deal with Disney to make games based on Star Wars should have been a godsend—a contractual coup that could carry the company forward for years to come. Instead, it appears to be more akin to the Executor trying to parallel park in front of the Death Star: According to this CNBC report, EA has shed $3 billion in stock value since the launch of Star Wars Battlefront 2, and the fallout could impact the future direction of its entire business.
EA's share price is down 8.5 percent since the beginning of November, compared to an increase of five percent for Take-Two, and 0.7 percent for Activision, over the same period. It's not a meltdown—EA's stock price is still up 39 percent over 2017, having reached an all-time high in October. But backlash against in-your-face loot boxes lit a fire, and EA's decision to turn them off—temporarily—only emphasized the game's apparent inability to function well without them.
Initial sales have reportedly flagged, but the real problem is the loot box boondoggle. EA reported earlier this year (via GamesIndustry) that the microtransaction-driven FIFA Ultimate Team is now worth $800 million annually, but the need to clean up the Battlefront 2 mess could see that figure cut. In a recent investors note, Cowen and Co. analyst 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."
Interestingly, while there have been reports of Disney's displeasure with EA over this whole mess, EA CFO Blake Jorgensen said at the Credit Suisse Annual Technology, Media and Telecom Conference (via Polygon) that it was actually a commitment to Star Wars canon and "realism" that led it to fill Battlefront 2 loot boxes with credits, Star Cards, and similar items, rather than throwaway cosmetics that don't have any impact on gameplay.
"The one thing we're very focused on and they are extremely focused on is not violating the canon of Star Wars," he said. "It's an amazing brand that’s been built over many, many years, and so if you did a bunch of cosmetic things, you might start to violate the canon, right? Darth Vader in white probably doesn't make sense, versus in black. Not to mention you probably don't want Darth Vader in pink. No offense to pink, but I don't think that's right in the canon."
"So, there might be things that we can do cosmetically, and we’re working with Lucas[film] on that. But coming into it, it wasn’t as easy as if we were building a game around our own IP where it didn’t really matter. It matters in Star Wars, because Star Wars fans want realism."
It's an admirable commitment to the integrity of the brand, I suppose, but I can't help thinking that there was probably a better way to go about it. Also, I suspect that these guys would disagree.
Thanks PC GAMER
Electronic Arts' exclusive deal with Disney to make games based on Star Wars should have been a godsend—a contractual coup that could carry the company forward for years to come. Instead, it appears to be more akin to the Executor trying to parallel park in front of the Death Star: According to this CNBC report, EA has shed $3 billion in stock value since the launch of Star Wars Battlefront 2, and the fallout could impact the future direction of its entire business.
EA's share price is down 8.5 percent since the beginning of November, compared to an increase of five percent for Take-Two, and 0.7 percent for Activision, over the same period. It's not a meltdown—EA's stock price is still up 39 percent over 2017, having reached an all-time high in October. But backlash against in-your-face loot boxes lit a fire, and EA's decision to turn them off—temporarily—only emphasized the game's apparent inability to function well without them.
Initial sales have reportedly flagged, but the real problem is the loot box boondoggle. EA reported earlier this year (via GamesIndustry) that the microtransaction-driven FIFA Ultimate Team is now worth $800 million annually, but the need to clean up the Battlefront 2 mess could see that figure cut. In a recent investors note, Cowen and Co. analyst 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."
Interestingly, while there have been reports of Disney's displeasure with EA over this whole mess, EA CFO Blake Jorgensen said at the Credit Suisse Annual Technology, Media and Telecom Conference (via Polygon) that it was actually a commitment to Star Wars canon and "realism" that led it to fill Battlefront 2 loot boxes with credits, Star Cards, and similar items, rather than throwaway cosmetics that don't have any impact on gameplay.
"The one thing we're very focused on and they are extremely focused on is not violating the canon of Star Wars," he said. "It's an amazing brand that’s been built over many, many years, and so if you did a bunch of cosmetic things, you might start to violate the canon, right? Darth Vader in white probably doesn't make sense, versus in black. Not to mention you probably don't want Darth Vader in pink. No offense to pink, but I don't think that's right in the canon."
"So, there might be things that we can do cosmetically, and we’re working with Lucas[film] on that. But coming into it, it wasn’t as easy as if we were building a game around our own IP where it didn’t really matter. It matters in Star Wars, because Star Wars fans want realism."
It's an admirable commitment to the integrity of the brand, I suppose, but I can't help thinking that there was probably a better way to go about it. Also, I suspect that these guys would disagree.
Thanks PC GAMER
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