2024 has been a challenging year for Electronic Arts, marked by layoffs and studio closures across the gaming industry. Despite a promising revenue forecast of $7.8 billion, disappointing game performances led to a significant drop in stock prices. Key franchises like EA Sports FC and Madden NFL faced internal competition and declining sales. As the company undergoes restructuring, including layoffs at Bioware, it remains projected to achieve around $2 billion in profits for the fiscal year.
The Rollercoaster of 2024 for Electronic Arts
The year 2024 has been a tumultuous time for many in the gaming industry, with numerous announcements regarding layoffs and studio shutdowns. However, Electronic Arts (EA) has managed to stay afloat amidst these challenges, showing promising financial results. By the end of the year, EA’s financial team had increased their revenue forecast to an impressive $7.8 billion. Yet, the disappointing performance of titles like Dragon Age: The Veilguard and the lackluster figures for EA FC 25 compelled the studio to adjust their projections downward, resulting in a historic dip in stock prices by the end of January.
Challenges and Setbacks in the Gaming Giant’s Journey
For years, EA has stood as a pillar in the gaming world, consistently enjoying growth while other studios struggled with the pandemic’s aftereffects and rising inflation. This success was reflected in EA’s stock price, which nearly doubled over the past five years. Investors valued the company’s stability, driven by the strong performances of its various divisions, especially the sports sector. Franchises like EA Sports FC and Madden NFL have dominated the gaming landscape, generating substantial annual sales and additional revenue through paid content in their online modes, such as FIFA Ultimate Team (FUT).
Despite these achievements, the latter half of 2024 proved to be challenging. The success of EA College Football 25, which became the best-selling game in the U.S. market, came at the cost of Madden NFL 25, leading to a sharp decline in its sales. The release of two similar titles in close succession created internal competition that hurt the sales of both. This was not the only setback; the much-anticipated Dragon Age: The Veilguard fell short of expectations, attracting only 1.5 million monthly players at launch instead of the anticipated 3 million.
Moreover, EA FC 25, the successor to the iconic FIFA series, faced its own set of challenges. After losing its long-standing partnership with FIFA, the title struggled with gameplay issues and dwindling player engagement, particularly in its FUT mode. As competitors like eFootball and UFL gear up to enter the market, EA must contend with a more crowded landscape.
In light of these challenges, EA’s stock experienced a significant downturn, losing nearly $30 in just two trading sessions—a drop of about 20%. From a high of nearly $168 in November 2024, the stock’s decline represents a staggering market capitalization loss of almost $12 billion. As the novelty of EA College Football 25 fades, concerns grow that its sales may not achieve record-breaking numbers in future installments.
To address these challenges, EA has announced layoffs within its Bioware studio, which was held accountable for the commercial failure of Dragon Age: The Veilguard. Reports suggest that up to half of the team involved in the project may be affected. As the company pivots towards franchises with proven profitability, future projects, including a revival of Battlefield, are expected to return to the series’ successful roots.
Despite the current difficulties, EA is projected to report profits of around $2 billion for the fiscal year. A financial analyst from Moffett Nathanson recently upgraded their estimates for EA’s stock, encouraging clients to consider investing in the company following the layoff announcements.