The impact of microtransactions on Star Wars Battlefront 2 hits EA where it hurts: in its stock value. Some analysts see EA’s business model in danger.
As CNBC reports, EA investors are withdrawing their money.
The reason given is the fan reactions to the business model of Star Wars Battlefront 2. Gamers made enough noise until EA yielded and removed the microtransactions from the game.
Bad press and poor sales lower EA’s profit
Initially, it was intended that players could either earn or purchase their progress in Star Wars Battlefront 2 through loot boxes. Following fan protests and a call from Disney, EA temporarily removed the microtransactions from the game.
This has led to a decline in EA’s stock value by 8.5% in a month, resulting in a loss of 3.1 billion US dollars in market value.
During the same period, competitors like Take-Two (GTA 5) and Activision Blizzard (WoW, Call of Duty, Destiny 2) have increased in value.
More cautious action regarding microtransactions is expected
The decline in value is attributed to EA’s forecast, which estimated slightly lower revenues for the December quarter than originally expected. It seems adjustments had to be made due to Star Wars Battlefront 2.
The loot box problems have raised doubts about EA’s business model. However, the situation with FIFA Ultimate Team had been excellent, generating 800 million US dollars with high profit margins last year. EA planned to transfer this model to Battlefront and Battlefield. Now, the overall model could be in jeopardy.
This is at least what gaming personalities like Jim Sterling and YouTuber Joe Vargas (Angry Joe Show) believe. They are quoted by CNBC as voices predicting that EA will act more cautiously in the future. The industry needs to scale back its loot box plans.
Additionally, the uproar has negatively impacted the sales figures of Star Wars Battlefront 2. According to analysts, sales have fallen short of expectations, even during the strong sales Black Friday weekend.
EA now less attractive for investors
Analysts believe it is now time for the gaming industry to establish binding standards for microtransactions to prevent such controversies in the future.
Now that the gaming press and community have reacted so sensitively to the issue, it is believed that EA will act more cautiously in the future. This also reduces profit. Investors may be disappointed by these developments in the gaming industry and expect a lower cash flow from microtransactions.
However, the current 3 billion in reduced market value does not hit EA too hard. Compared to last year, their shares are still worth 39% more.
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