Electronic Arts said today its results for the third fiscal quarter and the March 31 fiscal year will be lower than expected because of weaker-than-expected sales of Dragon Age: Veilguard and global football (soccer) games.
EA’s stock fell 10.71% to $127.11 in after-hours trading after the announcement.
EA’s initial guidance for fiscal year 2025 anticipated mid-single-digit growth in live services net bookings. However, the company now projects a mid-single-digit decline, with Global Football accounting for the majority of the change.
Separately, Dragon Age: Veilguard only engaged 1.5 million players during the quarter, down nearly 50% from EA’s expectations. Our own Rachel Kaser loved it.
Global Football had experienced two consecutive fiscal years of double-digit net bookings growth. However, the franchise experienced a slowdown as early momentum in the fiscal third quarter did not sustain through to the end. As a result, EA revised its outlook for Global Football to end the fiscal year down mid-single-digit at the midpoint of the new outlook.
As a result, EA is providing preliminary results for its third fiscal quarter and updating its fiscal year 2025 net bookings outlook. It now expects net bookings of approximately $2.215 billion for the third fiscal quarter and an updated range of $7 billion to $7.150 billion for fiscal year 2025. EA had previously anticipated $7.5 billion to $7.8 billion.
For its third fiscal quarter, EA now expects GAAP net revenue to be approximately $1.883 billion and approximately $1.11 in GAAP diluted earnings per share.
“During Q3, we continued to deliver high-quality games and experiences across our portfolio; however, Dragon Age and EA Sports FC 25 underperformed our net bookings expectations,” said Andrew Wilson, CEO of EA, in a staetment. “This month, our teams delivered a comprehensive gameplay refresh in addition to our annual Team of the Year update in FC 25; positive player feedback and early results are encouraging. We remain confident in our long-term strategy and expect a return to growth in FY26, as we execute against our pipeline.”
“We continue to balance investment for future growth with operational discipline, and remain committed to EA’s long-term financial framework,” said Stuart Canfield, CFO of EA, in a statement. “As we look to FY26, we expect to grow as we launch more of our iconic franchises.”
Dragon Age: The Veilguard was released in October for PS5, Xbox Series X/S, and PC. And this month, the game’s director, Corine Busche, confirmed she was leaving BioWare for an offer she could not turn down.
Colin Sebastien, an analyst at Baird Equity Research, said in a note that he expected growth trends to moderate for EA, but not to the extent outlined in today’s pre-announcement.
“Consistent with checks, American Football titles appear to be OK, and Dragon Age missed expectations (not a big surprise given reports of soft sales). However, FC deterioration is concerning given the historical resilience of the title and its significant contribution to EA’s profitability,” he wrote. “Near term, industry headwinds will continue, and FC issues will stoke more concern around the resilience of top recurring franchises. Results from Take-Two will be telling.”
Fiscal Q3 net bookings were ~$2.22 billion (-6.5% Y/Y), below Baird’s estimate of $2.49 billion (consensus slightly higher at $2.51 billion) with roughly $200 million shortfall from FC/$100 million Dragon Age.
Additionally, EA’s revised full-year guidance suggests ~$315 million lower fiscal Q4 bookings as trends may not be improving month-to-date. EA now expects ~MSD% Y/Y decline in football bookings vs. positive Y/Y growth previously.
“So what happens from here? Hard to say, but we’d expect EA to increase support for FC, likely in the form of marketing spend and a more detailed review of pipeline plans for the franchise,” Sebastien wrote. “While this could impact margins, EA could also accelerate efficiency initiatives, such as ramping uses of productivity-improving technology (e.g., GenAI). Additionally, we expect EA may comment on plans for Mass Effect, given that the Dragon Age team is reportedly now working on that title, and the commercial success of Battlefield will now be more important if FC trends don’t rebound.”
While industry trends are still choppy, Sebastien wrote that the second half of 2025 should be better.
“After a tough couple of years (supply chain issues, fewer blockbuster games, expensive hardware, consumer spending shifts, competition for user time), we still expect a better 2025, perhaps beginning with the launch of Nintendo’s Switch 2, and assuming key video game software and hardware releases are on time (e.g., GTA VI could still be delayed),” he wrote. “Near term, industry headwinds likely continue, console hardware needs price cuts, and we expect FC trends to stoke new concerns around the resilience of top recurring franchises. “