On Tuesday, Electronic Arts (EA) lowered its annual booking forecast, as publishers of FIFA and Apex Legends both grapple with a surge in the dollar this year and a slowdown in the gaming industry from the height of the pandemic. The company now expects annual bookings — an indicator of future revenue — to be in the range of $7.65 billion (approximately Rs 632.8 crore) to $7.85 billion (approximately US$8.10 billion (approximately Rs. 67,000 crore).
After growing rapidly during the pandemic, video game sales have been slowing this year due to a lack of major releases and reduced consumer spending facing decades of high inflation.
This, combined with long-standing supply chain challenges for the industry, also weighed on quarterly revenue from Sony’s PlayStation 5 and Microsoft’s Xbox content and services.
Overall, the gaming market is expected to grow by just 2% in 2022, a far cry from the 23% growth seen in 2020, according to research firm Newzoo.
The nearly 17% appreciation of the U.S. dollar this year has also dampened growth, with EA forecasting annual bookings to be hit by around $200 million (approximately Rs 16.5 crore). More than half of the company’s revenue comes from outside the United States. But with no major releases in the first three quarters of 2022, EA could get some support from the October launch of FIFA 23 – the latest installment of its popular football series.
FIFA 23 has had the best launch week of any game in the series, and it looks like it will be in more demand thanks to next month’s Soccer World Cup in Qatar. EA posted adjusted sales of $1.75 billion (approximately 14,475 crore rupees) in the second quarter, missing analysts’ expectations of $1.8 billion (approximately 148.9 crore rupees), according to Refinitiv data.
Net income rose to $299 million (approximately Rs 24.7 crore) or $1.07 per share from $294 million (approximately Rs 24.3 crore) or $1.02 per share (approximately Rs 85 crore) a year ago.
© Thomson Reuters 2022