EA is a publisher that has seen many highs and many lows over the course of its multiple decades in the industry. Its aggressive business practices, in particular with regards to buying out developers such as Pandemic and BioWare, seemed to reach its peak when EA acquired PopCap for $1 billion. Eventually, however, the bubble had to burst, and Electronic Arts saw an obvious slump in share price over several years, during which time it was named the Worst Company in America not once but twice.
Investors were clearly worried about the publisher, as EA looked to be in serious trouble in the markets. The company’s stock nosedived to under $12 in 2012, and also suffered a severe drop of 28 points between July and December 2013 after a brief climb. The end result was turmoil behind the scenes, with the departure of CEO John Riccitiello, the closure of several departments including the acclaimed EA Partners project, and widespread layoffs.
Since then, however, the publisher has seen an incredible resurgence – at least in terms of share prices. It’s now been revealed that EA’s stock has hit an all-time high in a powerful turnaround. According to a report by CNBC, EA’s stock has now roughly doubled over the space of just a year, hitting the $72.07 mark for the first time, and staking a claim as the best-performing stock in the whole S&P 500.
There are a number of factors that have resulted in EA’s return to form, and chief among them is the upcoming release of Star Wars Battlefront. “Gamers are very interested in it,” says analyst Michael Olson. “About 20 percent of gamers said it’s the game they’re most excited about buying this year, which is up from a previous survey.” Sales figures are obviously expected to match or improve on estimates, with EA itself setting a target of 9-10 million copies sold.
The growth of digital revenue has also been a large contributing factor in EA’s growth. “Digital revenue has been able to account for more than half of the company’s overall revenue,” said Olson. “That should continue to grow going forward.” With the publisher staking a claim to the digital market through increased emphasis on mobile gaming and schemes such as EA Access, it’s likely that this focus on digital will continue in future.
Those interested in EA’s financial stability will get a better look at the end of the month, then the publisher is set to announce its first quarter financial results. So far, however, it certainly looks like EA is heading in to another period of financial growth. Let’s just hope that the company remembers to continue to respond to consumer feedback, and does not forget those plans to establish a player-first culture.