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Continued Strong Gaming Demand Prompts Raise Of Sale Forecast By EA And Rival Take-Two

Continued Strong Gaming Demand Prompts Raise Of Sale Forecast By EA And Rival Take-Two
More customers chose to continue to play marquee titles such as "FIFA 22" and "Grand Theft Auto V" even after the lifting of the pandemic induced lockdowns, which prompted Electronic Arts Inc and its competitor Take-Two Interactive Software Inc to increase their adjusted revenue projections for the entire of 2021.
There was an almost 3 per cent surge in the stocks of the California-based EA in extended trading after the company announced its upbeat forecast with the company also reporting a more than twofold growth in the adjusted sales for its latest completed quarter which was more than average expectations of analysts primarily because of its strong titles including "Apex Legends" and "Madden NFL 22 which continued to attract consumers.
The firm is also betting on the imminent release of the warfare title "Battlefield 2042," citing considerable consumer interest and engagement in the game's beta version.
"We have built a larger and larger audience and a social network around those audiences so that they don't disappear even if they are going back to work or spending more time outside of their home," Chief Financial Officer Blake Jorgensen said in an interview.
In the second quarter of the current year, there was a 2 per cent growth in consumer spending on video games in the United States which came in at $14 billion, according to NPD statistics.
On the other hand, anticipated strong demand for its main title games "Grand Theft Auto V," "NBA2K," and "Red Dead Redemption 2", prompted a rise in its adjusted revenue forecast to $3.3 billion to $3.4 billion was announced by EA’s rival Take-Two.
There are also reports of EA contemplating a rebranding for its best-selling soccer title "FIFA" even as the company is currently considering getting into a rights arrangement with the sport's international governing body.
However, analysts are of the view that the company could find it difficult to attract more new players in the video game if the company actually changes the name of the almost three-decade-old team game franchise.
"We are taking a pause to decide if he should resign the license or actually rebrand it," Jorgensen said.
The forecast of adjusted sales for the full year of 2021 as announced by EA was at $7.63 billion, compared to its previous forecast of the figure at $7.40 billion. Analysts had expected the company to forecast the figure at $7.59 billion, according to Refinitiv data.
Meanwhile, a forecast of its quarterly adjusted sales below the market expectations was announced by EA’s rival Activision Blizzard on Tuesday, while also announcing a postponement of its planned launch of two much-awaited titles.

Christopher J. Mitchell

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