Jefferies analyst Timothy O'Shea downgrades EA to hold from buy Thursday and warned clients that EA's 2019 content lineup remains largely untested.
"Non-sports games is precisely the area where EA has the most to prove," O'Shea wrote. "Excluding sports games, EA has launched a string of misses," he writes.
The company — and its investors — hasn't had too much to worry about in recent years thanks to the success of FIFA Ultimate Team, the latest chapter of what's become one of the most popular sports video game series in history. Ultimate Team, which allows gamers build up a dream team, is EA's highest-margin business, generating sales through virtual goods, the analyst said.
Such purchases, though, have proven to be a heated topic among EA customers and across its games.
"When EA brought loot boxes to Star Wars Battlefront 2, the fan backlash was swift and severe," O'Shea added. "Battlefront 2 dramatically underperformed its original estimates, and bowing to pressure EA capitulated to gamers by removing loot boxes from the game. This was a first important sign that Ultimate Team growth would begin to stall."
SOURCE
When even investors begin to get alarmed about EA, you know they've fucked up.