Electronic Arts Inc. stock price has soared on February 6, from $80.20. At the time of this writing, the stock price is up to $104.60, with no signs of slowing down. Although Apex Legends was released on February 4th, the game received mass awareness following the days after it’s release which triggered investors to jump on board the NASDAQ train.
Bullish on EA
Electronic Arts Inc. (NYSE:EA) has seen a massive spike in it’s stock price days after the release of the Apex Legends. This is a big thanks to the 25 million gamers who downloaded the game in a week span. Nintendo was the same situation with it’s launch of the Pokemon GO app, which saw a 200% increase in it’s stock price. The success of the Apex Legends launch is the main reason why EA has turned around on the NYSE after numerous analysis stating that the company’s stock is on a downtrend.
EA Was in a Bad Situation Prior to Apex Legends Launch
Prior to this increase in EA’s stock price on February 6 , EA investors were hit with a bearish sentiment due to the poor performance of Battlefield V. What was suppose to be a success for EA, now turned into a disaster. Although Battlefield V wasn’t the only reason EA’s stock price was heading downwards, it was EA’s most recent push to turn things around from a stagnant year. Shareholders were disappointed with EA’s performance, and critics were right at EA’s doorstep.
Bad reviews tainted online gaming communities, specifically on Reddit where users didn’t hold back.
More Bad News Before the Launch of Apex Legends
Days before the launch of Apex Legends, Seeking Alpha, a popular crowd-sourced content service for financial markets had a streak of negative articles about EA. WY Capital, a contributor for Seeking Alpha wrote an article on January 30th of this year titled, “Avoid EA: The Fun Is About To End“. In short, WY Capital claimed that “EA’s strong revenue and profit growth is coming from the erosion of EA’s most valuable asset, customer trust“.
There was a common view of Electronic Arts pushing DLC paid content on gamers which they weren’t use to seeing from the company; hence the lost of trust. Some gamers even went as far as saying they want the old EA back. In addition to the bad news was EA’s mentioning of their revised Fiscal Year 2019 net bookings which went from $5.55 billion to $5.20 billion. You didn’t have to be a Financial Analyst on Wall street to see the bearish trend. However, things changed with the release of Apex Legends on the 4th of this month.
Apex Legends Helped Increase EA Stock Price
Although Apex Legends was released with little news to the public, it was in production for close to two years before it’s release. The developers of Respawn Entertainment have been working on the Battle Royale game shortly after being acquired by Electronic Arts. They were working on a potential Titanfall 3, but with the rise of Battle Royale they saw an opportunity using the Titanfall engine. Seeing the success of PUBG, Respawn started testing Titanfall concepts in a Battle Royale setting.
Despite having been playing Apex for the last 18 months as much as possible, playing in squads with randos this week has had a weird effect on me. It’s like I’m rediscovering everything I already liked about the game. What an incredible week!
— Drew McCoy (@DKo5) February 10, 2019
EA Doesn’t Like Risk
In an article published by theverge, Drew McCoy, the executive producer on Apex Legends said that EA weren’t fans of “risk“, and given the situation that EA was in prior the the launch, one could imagine that they idea of releasing a free-to-play game wasn’t settling in very good for them. However, on the brighter side of things, they had a benchmark which was Fortnite. Epic games has reported that Fornite had generated 200 million users, which equated to $1 billion in revenue.
- Other: Who is Dizzy Apex Legends?
With the successful launch of Apex Legends, they have already established 25 million downloads and 2 million concurrent players in one week. It took Fortnite 3 months to get to 30 million downloads. Although there’s risk to releasing a free-to-play game, achieving that many downloads from the start is a telltale sign that Apex Legends did something right to catch the attention of gamers worldwide. Will Respawn Entertainment be able to continue riding the train?
Apex Legends has set new records and is still the most popular game on Twitch. There’s no signs of the game slowing down, and we hope to see what Respawn Entertainment has in store for us.