By
Bhushan Akolkar
June 2nd, 2023
Aftermath a tepid earnings report Electronic Arts recharges investors attention announcing its foothold in the battle royale games — Apex Legends that has attracted 25M of active users.
This February brings plenty of important news for investors and shareholders who are waiting for major industry players to make their earnings call. Almost daily the financial market burst into a huge success or otherwise, it plunges underneath a big failure that separates unlucky shareholders from their heart-earned money recklessly invested into a downgraded company.
When it comes to Electronic Arts the situation more resembles a roller-coaster as in two weeks this gaming behemoth managed to lose almost 3o per cent of EA stocks value following a tepid earnings report and then it has earned back investors’ sympathy releasing a smash-hit battle royale game.
Earnings Say Electronic Arts Fell Short in Q3
Last week Electronic Arts has reported its Q3 fiscal 2019 results and though the company keeps afloat earnings estimates, revenues fell short of the Wall Street expectation. Lacklustre sales of the company’s gaming hits, Battlefield V and FIFA 19, have adversely affected EA’s market performance. As a result, the company lowered its full fiscal guidance and the stock price dropped nearly 13 per cent.
Lots of financial advisors, as well as investors, have waved away from Electronic Arts assuming that the company’s downgraded performance is the beginning of a long-term recession. However, Electronic Arts once again proved that it is better to judge the company based on its long-lasting growth rather than on its short-term woes. Until the last moment, Electronic Arts kept its new battle royale game product in secret and when Apex Legends was finally released it smashed the market.
As soon as the game went on air, EA spiked by 16 per cent. Apex Legends has already attracted over 25 million users in just seven days from its launch. The success of this new free-to-play battle royale game outreached the release of currently most playable niche game Fortnite from Epic Games. At the moment Fortnite has a 200 million audience but considering a fast pace taken by Apex Legends, it might face a viable competitor soon.
Thanks to Apex Legends, EA closed Tuesday trading with 8 per cent increase making EA stock price exceeds $104 per share and analysts say this positive momentum is likely to last for some time.
Revolutionizing Twitch Marketing
While the longevity of Apex Legends resilient impact on EA stock remains a question mark, there is no doubt that this game head off the entire gaming industry. The overwhelming success of Apex Legends is of special interest as Electronic Arts did not broadcast any TV advertising for the title, they also did not announce gaming press previews or online trailers. For Apex Legends the marketing team of Electronic Arts decided to step away from traditional advertising campaigns and take up something new.
EA drew attention to Apex Legends by paying gamers to stream it on their Twitch channels. The top Twitch streamers have millions of followers watching them play top games. Therefore using streamers was a good shot to drive awareness for Apex Legends.
The vast swaths of Twitch’s top streamers said they were being sponsored by Respawn, EA’s development studio, to stream the game on Twitch. The sponsorships were likely the main factor in driving Apex Legends boost to the top of gaming charts consequently making such a valuable exposure for EA’s stock ratings.