May 7 (Reuters) - Electronic Arts Inc posted better-than-expected quarterly revenue on Tuesday, riding on the strength of its latest battle royale sensation, “Apex Legends”, but its sales forecast for the current quarter fell short of estimates.
EA said it expects first-quarter adjusted revenue of $690 million, well below analysts’ estimates of $807.8 million. Its full-year adjusted revenue forecast of $5.10 billion was also below estimates of $5.16 billion.
Game franchises such as “Battlefield” and “FIFA” are among the company’s most iconic, but the rapid rise of online, free-to-play games with engaging formats are challenging the dominance of traditional game publishers, including EA, Activision Blizzard and Take-Two Interactive Software Inc.
The battle royale format in multi-player gaming, which allows dozens of players to battle each other to the death until the last survivor, became wildly popular in 2018 thanks to “PUBG” and Epic Games’ “Fortnite,” two games which are also credited with introducing newer audiences to gaming.
To cash in on the popularity, EA launched “Apex Legends” and “Battlefield V Firestorm” during the quarter, while also releasing online multiplayer action video game “Anthem”.
Apex Legends had 50 million sign ups in just a month, suggesting that EA could withstand competition from “Fortnite”.
On an adjusted basis, EA’s fourth-quarter revenue was $1.36 billion, beating estimates of $1.20 billion, according to IBES data from Refinitiv.
The company’s net income fell to $209 million, or 69 cents per share, in the fourth quarter ended March 31 from $607 million, or $1.95 per share, a year earlier. (Reporting by Arjun Panchadar in Bengaluru)