EUR 850.00 For Business Accounts Only

Morningstar | EA Delays Battlefield V Launch by a Month, Likely Due to Crowded October Slate

On Aug. 30, EA announced that Battlefield V, the next installment of its premier first-person shooter franchise, will now launch Nov. 20, a month later than previously planned. Developer Dice will use the additional time to make some final tweaks to the core gameplay for the title. Primarily as a result of the delay, management lowered net booking guidance for fiscal 2019 to $5.20 billion from $5.55 billion. We are maintaining our narrow moat rating and fair value estimate of $115 per share. Delays like this are inherent in the video game business and in this case create a slight deferral, not loss, of revenue. While shares fell over 8% intraday on the launch delay news, EA still trades in 3-star territory. We would seek a wider margin of safety to protect against far more meaningful risks (such as a release like Battlefield V flopping with customers) before investing in this high-uncertainty name.

While we don’t doubt that Battlefield V could benefit from more time to perfect its gameplay, we believe the core reason for the delay is a crowded release slate in October. Battlefield V’s original launch date of Oct. 20 is sandwiched between two highly anticipated games, Activision Blizzard’s Call of Duty: Black Ops 4 and Take-Two’s Red Dead Redemption 2. The latter title is a sequel to the 2010 Western shooter from Rockstar Games, which was one of the best-selling games of the previous console generation. We (along with many other analysts) expect RDR2 to be one of the top-selling games of 2018 as critic and fan excitement appears much higher for the title than competitors like Battlefield V.

We think EA management is demonstrating that it learned from the plight of Titanfall 2. The shooter launched into a similarly packed release slate in 2016 and never gained traction. While the loss of initial sales in the first months after release is painful, the larger longer-term issue is the lack of an installed player base for the multiplayer game mode that would have purchased microtransactions and downloadable content. By delaying the launch, EA apparently believes that Battlefield V will be able to gather and hold on to a larger player base, making the game more profitable over the long run.