Electronic Arts (NASDAQ:EA) is one of the world’s largest third-party video game publishers. Shares have climbed 14.5% in 2019 as of close on May 13. However, the stock is down 31.9% from the prior year.
The company released its fourth-quarter and full-year results for fiscal 2019 on May 7. Digital net bookings rose 5% year-over-year to $3.722 billion and net cash from operating activities hit $1.547 billion for the trailing twelve months. EA launched two new original IP titles in the quarter; Apex Legends and Anthem. Anthem has struggled at launch and represents another disappointment for BioWare. The developer rose to prominence on the back of its Dragon Age and Mass Effect series but has faltered in recent years.
EA has said that the handling of large, live-service games is likely to change in the coming years. Western publishers may adopt an approach that is seen in Asia. Major online games in Asia go through a soft launch period and multiple community tests before going live. Western publishers have continued with older conventions of "hype and release", ignoring how the industry has evolved.
EA is forecasting a strong year in FY2020. It projects net revenue to hit roughly $5.375 billion and forecasts net income of approximately $2.595 billion. Anticipation for Euro 2020 should also boost EA’s FIFA property.
EA stock is still trading at the low end of its 52-week range. Shares had an RSI of 37 as of close on May 13, this puts the stock close to technically oversold territory. EA and the broader video game industry is facing challenges, but FY2020 is still shaping up to be a strong one.
