EA revenue beats estimates on 'Apex Legends' boost, shares jump

(Reuters) - Electronic Arts Inc posted better-than-expected quarterly revenue on Tuesday, riding on the popularity of its battle royale game, “Apex Legends”, sending its shares up 7 percent in extended trading.

FILE PHOTO: An Electronic Arts (EA) video game logo is seen at the Electronic Entertainment Expo, or E3, in Los Angeles, California, United States, June 17, 2015. REUTERS/Lucy Nicholson/File Photo

EA launched “Apex Legends” and “Firestorm”, a battle royale version of its “Battlefield V” game, in the latest quarter to cash in on the success of the battle royale genre made popular by “PUBG” and Epic Games’ “Fortnite”.

EA’s battle royale game had attracted 50 million players just a month after its launch in February and the company said that millions more had signed up since then, suggesting that it could withstand competition from “Fortnite”.

“It has also helped us cut into new player audiences as nearly 30 (percent) of Apex Legends players are new to EA,” Chief Executive Officer Andrew Wilson said on a post-earnings call.

In battle royale games, players are given the task to survive and outlast everyone by eliminating opponents.

EA forecast net bookings from Apex Legends in the range of $300 million to $400 million in fiscal year 2020, adding that the forecast did not assume any contribution this year from future mobile versions or games in the Chinese market.

The company said it was in advanced talks to bring its hit game to China and launch a mobile version.

However, Chief Financial Officer Blake Jorgensen told Reuters the launch of EA’s online action video game, “Anthem”, in February underperformed the company’s expectations.

The company expects its new “Star Wars Jedi: Fallen Order” title, which will release in November, to sell 6 million to 8 million units in fiscal 2020.

On an adjusted basis, EA’s fourth-quarter revenue was $1.36 billion, beating analysts’ average estimates of $1.20 billion, according to IBES data from Refinitiv.

However, EA forecast first-quarter adjusted revenue of $690 million, well below analysts’ estimates of $807.8 million. Its full-year adjusted revenue forecast of $5.10 billion was also below estimates of $5.16 billion.

Earlier on Tuesday, EA also said it expanded its EA Access subscription service to Sony’s PlayStation 4, starting July.

The service, which has been available on Microsoft’s Xbox and PC via Origin since 2014, is priced at $4.99 per month and $29.99 per year.

(The story corrects spelling error in CFO’s last name in paragraph eight.)

Reporting by Arjun Panchadar in Bengaluru; Editing by Anil D’Silva