(Reuters) – Electronic Arts Inc lowered its annual bookings forecast on Tuesday as the publisher of “FIFA” and “Apex Legends” struggles with this year’s surge in the U.S. dollar and a gaming industry slowdown from pandemic heights.
The company now expects annual bookings – an indicator of future revenue – between $7.65 billion and $7.85 billion, compared with $7.90 billion to $8.10 billion earlier.
Redwood City, California-based EA’s shares were down nearly 4% in extended trading. After a meteoric rise during the pandemic, videogame sales have been easing this year due to a lack of major releases and lower spending by consumers facing decades-high inflation.
That, coupled with the industry’s prolonged supply-chain challenges, also pressured quarterly revenue from Sony Corp’s PlayStation 5 and Microsoft Corp’s Xbox content and services.
Overall, the gaming market is expected to grow just 2% in 2022, according to data from research firm Newzoo, a far cry from 2020’s 23% jump.
A near 17% rise in the U.S. dollar this year has also stifled growth, with EA forecasting a roughly $200 million hit to annual bookings. The company earns more than half of its revenue from outside the United States. But EA, which had no major releases in the first three quarters of 2022, could get some support from the October launch of “FIFA 23” – the latest installment in its popular soccer franchise.
“FIFA 23” had the best launch week of any game in the series and it looks set for more demand thanks to the soccer World Cup in Qatar next month.
EA booked second-quarter adjusted sales of $1.75 billion, missing the $1.80 billion expected by analysts, according to Refinitiv data.
Net income rose to $299 million, or $1.07 per share, from $294 million, or $1.02 per share, a year earlier.
(Reporting by Tiyashi Datta and Aditya Soni in Bengaluru; Editing by Devika Syamnath)
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