Thursday, November 30th 2017
EA Bleeds $3.1 Billion in Stock Value Over Battlefront II Fiasco
Electronic Arts (EA) bled USD $3.1 billion (£2.3 billion) in stock value at the markets over the week, as the company scaled down its controversial loot-crate system deployed in "Star Wars: Battlefront II." The company is fighting a PR debacle as gamers complain of terrible pricing of the base-game, DLC, and an aggressive loot-crate system that's drawing the attention of government regulators around the world, who are threatening to impose gambling regulations against the game.
The concept of loot-crate is simple. You pay a seemingly small amount of money for a "mystery box" containing either something great (like weapon-attachments), or something of no tangible impact on gameplay (like skins). You're incentivized to buy more loot-crates in hope that you'll get something better. This becomes a gamble. In 2016, EA earned over $800 million in profits selling loot-crates among other micro-transactions, across various game franchises, such as Battlefield and Need for Speed. With EA scaling down several of its ancillary revenue models for the game, the studio's stock bled 8.5 percent month-to-date. Drew Crum, an analyst with investment firm Stifel also attributes underwhelming Black Friday sales of the game to EA's bear-hug.
Source:
GameRevolution
The concept of loot-crate is simple. You pay a seemingly small amount of money for a "mystery box" containing either something great (like weapon-attachments), or something of no tangible impact on gameplay (like skins). You're incentivized to buy more loot-crates in hope that you'll get something better. This becomes a gamble. In 2016, EA earned over $800 million in profits selling loot-crates among other micro-transactions, across various game franchises, such as Battlefield and Need for Speed. With EA scaling down several of its ancillary revenue models for the game, the studio's stock bled 8.5 percent month-to-date. Drew Crum, an analyst with investment firm Stifel also attributes underwhelming Black Friday sales of the game to EA's bear-hug.
64 Comments on EA Bleeds $3.1 Billion in Stock Value Over Battlefront II Fiasco
[LEFT]I think the worst that will happen is ESRB/PEGI being required to add "Gambling" to games that have loot boxes.
There may be a few countries that may go full ban on that content but I'm not sure which.[/LEFT]
This isn't about the investers listening to the people, they don't give a shit, it is about EA losing $3 Billion because they put out a product that people didn't want to buy because EA got too greedy, and because of backlash there was poor sales of a major product. The investers leaving is just a by-product of the backlash, but it is a by-product that EA is more likely to recognize.
Or, they need to open up the game so modders can create more content. It's a no win position currently, either you have to play online with random people that prevent you from leveling up unless you want to pay for shark cards, and hope you make enough to move up, or grind away for hundreds of hours to reach the same level as pay to play idiots. I'm not a fan of either idea honestly.
The global EA ..... time has bean come.
en.m.wikipedia.org/wiki/Electronic_Arts
Revenue
US$4.845 billion[1] (2017)
Operating income
US$1.224 billion[1] (2017)
Net income
US$1.210 billion[1] (2017)
Total assets
US$7.718 billion[1] (2017)
Total equity
US$4.060 billion[1] (2017
Great way to start the day.
Their Market Cap on Oct 31st was $36.8 Billion, yesterday at close they were at $32.5.(AFAIK, this is where the $3 Billion number is coming from.)
That's a little over an 11% drop in share price and market value. A one month drop of over 10% definitely gets a company's attention.Yes, but those numbers aren't where the $3 Billion comes from. It comes from the ~$32 Billion market value.
Belgium for a start. They've already ruled "loot-boxes" as gambling and that nation is not a gambling friendly country by any stretch.
And this; www.gameinformer.com/themes/blogs/generic/post.aspx?WeblogApp=news&y=2017&m=11&d=21&WeblogPostName=belgiums-gaming-commission-has-declared-that-lootboxes-are-gambling&GroupKeys=