EA sinks, Activision Soars As Coronavirus Keeps Everyone Locked Indoors
Video game publishers EA and Activision soundly beat earnings estimates Tuesday, but their stocks went in opposite directions on their future guidance.
Activision ended Monday up more than 6 per cent after predicting that gamers will continue turning to free-to-play games like its mega-popular “Call of Duty: Warzone” due to the financial impact of the coronavirus. EA, on the other hand, saw its shares slide 3.5 per cent after expressing uncertainty about the impact that the lack of real-world sports could have on the sales of its marquee franchises like “FIFA” and “Madden NFL.”
“We don’t know — because there’s no precedent on this – what happens long term if any of the sports seasons get delayed any further,” EA CFO Blake Jorgensen said on Tuesday, prompting the plunge. “But we do believe that everything we’re seeing now, particularly in esports, is that we can be a huge factor in helping people socialize and do what they love around the sports they love.”
Video game sales in the United States have surged in the last two months as the virus shut down the country and forced millions inside their homes, with sales in March hitting their highest in over a decade. And Activision and EA’s earnings report Monday reflected that.
EA posted adjusted earnings of $1.31 per share during, bearing estimates for 97 cents a share, on net bookings of $1.21 billion.