Game On: EA sees Q2, FY25 bookings at high end of guidance

“Game On” is The Fly’s weekly recap of the stories powering up or beating down video game stocks.

NEW RELEASES: This week’s most notable release is Electronic Arts’ (EA) latest soccer sim “EA Sports FC 25,” which launches September 27 for Nintendo Switch (NTDOY), PlayStation 4 (SONY), PS5, PC, Xbox One (MSFT), and Xbox Series X/S. Also out this week is Nintendo’s action-adventure game “The Legend of Zelda: Echoes of Wisdom,” which launches September 26 exclusively for Switch consoles.

EA INVESTOR DAY: At its Investor Day last week, Electronic Arts said that it expects its outlook for net bookings to be towards the high end of its Q2 and FY25 guidance ranges. “We are excited to unveil an in-depth look inside the growing scale and scope of our IP portfolio, as we accelerate engagement and social connection in and around our biggest franchises,” said Andrew Wilson, CEO of EA. “We are also introducing new experiences and leveraging innovative technology to serve our global communities and attract new audiences, as we continue to transform our business and shape the future of entertainment.”

“We are committed to growing our business at scale and expanding operating margins through a disciplined approach to capital allocation,” said Stuart Canfield, CFO of EA. “Our strategy gives us confidence we can significantly outpace market growth through fiscal 2027.”

Following the Investor Day event, analysts largely maintained their ratings on the stock but highlighted some potential positives, with TD Cowen saying that the company laid out an “ambitious but grounded” bookings target. Meanwhile, BMO Capital kept an Outperform rating on the shares, saying that the event laid the foundations for monetization beyond gaming with advertising and commerce. Additionally, Baird noted that core game franchises will drive growth for the next 2-3 years, but added that management outlined a broader strategy to double the active user base through AI-driven enhancements to content creation, communities and monetization in, around, and beyond games.

U.K. AUGUST GAME SALES: 1.74M video game units were purchased in the U.K. last month, a slight decline of 1.5% from August of last year, Gamesindustry.biz’s Christopher Dring (TTWO) had a good month, with “Grand Theft Auto V” coming first in sales and “GTA Online” coming in fourth, Dring says, adding that “Borderlands,” “Mafia,” and “WWE 2K” made the top ten as well. Other top sellers for August in the U.K., according to GSD physical and digital data, include Warner Bros. Discovery’s (WBD) “Hogwarts Legacy,” Electronic Arts’ “EA Sports FC 24” and “Titanfall 2,” and Bandai Namco’s (NCBDY) “Elden Ring.”

NINTENDO SUES ‘PALWORLD’ MAKER: Nintendo, together with The Pokemon Company, filed a patent infringement lawsuit in the Tokyo District Court against “Palworld” developer Pocketpair, Inc. on September 18, 2024. This lawsuit seeks an injunction against infringement and compensation for damages on the grounds that “Palworld,” which was developed and released by the Defendant, infringes multiple patent rights. “Nintendo will continue to take necessary actions against any infringement of its intellectual property rights including the Nintendo brand itself, to protect the intellectual properties it has worked hard to establish over the years,” the company said.

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MORE VIDEO GAME NEWS:

• Microsoft currently spends roughly $1B a year getting third-party games on its Game Pass subscription service, Bloomberg reports
• Sony announced a new State of Play presentation for September 24
• Take-Two’s Private Division will launch “Tales of the Shire: A Lord of The Rings Game” on March 25, 2025
• EA’s Respawn is working on the “final chapter” of its “Star Wars Jedi” series, VideoGamesChronicle reports
• Sega (SGAMY) said that “Like a Dragon: Pirate Yakuza in Hawaii” will launch February 28, 2025