By Wallace Witkowski
Electronic Arts Inc. shares rose in the extended session Wednesday, following a beating in the regular session, after the videogame publisher cleared up rumors that one of its big game releases would be delayed out into 2022 by announcing a 2021 release date.
EA /zigman2/quotes/206954087/composite EA +0.0079% shares, which had dropped as much as 7% and closed down 5.7% at $137.04 during the regular session, rose as much as 4% after hours. During the regular session, shares suffered following a report that the publisher’s “Battlefield 2042” title would be delayed until 2022.
After Wednesday’s close, however, EA announced that “Battlefield 2042” would be released worldwide on Nov. 19, 2021, a delay as compared with its previously expected Oct. 22 release, but not as bad as a release sometime in 2022.
“Building the next generation of ‘Battlefield’ during a global pandemic has created unforeseen challenges for our development teams,” said Oskar Gabrielson, who heads EA’s DICE studio, in a statement. “Given the scale and scope of the game, we had hoped our teams would be back in our studios together as we move toward launch.”
“With the ongoing conditions not allowing that to happen safely, and with all the hard work the teams are doing from home, we feel it is important to take the extra time to deliver on the vision of ‘Battlefield 2042’ for our players,” Gabrielson said.
The news of the EA delay follows on the heels of recent delays from rival Take-Two Interactive Inc. /zigman2/quotes/204008930/composite TTWO +1.76% , which last week announced a four-month delay of new versions of its “Grand Theft Auto” franchise. Take-Two shares finished up 0.4% on Wednesday.
NPD Group analyst Mat Piscatella said in emailed comments that delays that have occurred in 2021 shouldn’t come as a surprise.
“So long as the pandemic persists, companies will be wary to put firm release dates out there, and those that do get announced will be subject to delays,” Piscatella said. “Just a bit of the new normal for a while, I’m afraid.”
“We’ve been seeing a number of delays for months now because videogames are very difficult to make in the best of times, and they get much harder to make with a newly primarily remote workforce and all of the challenges people are faced with in these not-so-best of times,” Piscatella said.
Benchmark analyst Mike Hickey, who has a buy rating and a price target of $188 on EA, also noted “we suspect developers are struggling with productivity during the extended work from home scenario.”
“The stakes are higher than they’ve ever been for the biggest games,” NPD’s Piscatella said. “They’ve required more investment and time to make, and the difference between a hit and a miss to the financials can be massive.”
Many publishers are also mindful of last year’s buggy release of the long-awaited and overdue “Cyberpunk 2077” from CD Projekt SA /zigman2/quotes/206478470/delayed PL:CDR +0.55% that forced distributors like Sony Corp. /zigman2/quotes/201361720/delayed JP:6758 +2.04% to offer full refunds.
A few other videogame-related stocks finished slightly higher Wednesday, with Playtika Holding Corp. shares /zigman2/quotes/208028170/composite PLTK +3.05% finishing up 0.9% and Unity Software Inc. /zigman2/quotes/221035391/composite U +4.02% rising 0.3%, but others finished lower.
Zynga Inc. /zigman2/quotes/209662259/composite ZNGA +1.45% shares closed down 1.7%, Roblox Holding Corp. shares /zigman2/quotes/223883423/composite RBLX +2.42% declined 0.2%, and shares of app-monetization company AppLovin Inc. /zigman2/quotes/226004863/composite APP +7.40% shares finished down 2.7%.
In the broader market, the S&P 500 index /zigman2/quotes/210599714/realtime SPX +2.07% rose 0.9% and the tech-heavy Nasdaq Composite Index /zigman2/quotes/210598365/realtime COMP +3.03% gained 0.8%, while the iShares Expanded Tech-Software Sector ETF /zigman2/quotes/201870252/composite IGV +3.81% rose 1%.