Electronic Arts' Troubles Will Continue in 2014, Even With "Titanfall"

Electronic Arts (NASDAQ: EA  ) has had a difficult 2013. With launches of major games like SimCity and Battlefield 4 plagued with problems, the latter leading to lawsuits against the company, EA is proving to be incapable of launching major games successfully. This has allowed Activision Blizzard's (NASDAQ: ATVI  ) Call of Duty franchise to remain on top of the charts, with the reputation of the Battlefield series significantly degraded. As top talent leaves the company, EA will have a tough road ahead of it in 2014, even with the expected launch of two blockbuster games, one of which could end up being a killer app for Microsoft's (NASDAQ: MSFT  ) Xbox One console.

Abandoning the EA ship
Electronic Arts is comprised of a variety of studios, many acquired over the years. Recently, prominent figures in four different EA studios have left the company, creating a concerning case of brain drain for EA. Last year, after the bungled launch of SimCity, three top developers from Maxis left EA to start their own indie studio. Criterion Games, the EA studio responsible for the Need for Speed and Burnout series, lost its leaders a few weeks ago to the desire to start a new studio. Soon after, PopCap lost key executives for the same reason. And most recently, the founders of Chillingo, the studio responsible for publishing the original Angry Birds game, have left the company.

Continued problems with Battlefield 4
More than two months after launch, EA's Battlefield 4 is still having technical problems severe enough to render the game unplayable to some. Battlefield 4 was supposed to be EA's answer to Activision's Call of Duty franchise, but the game's problems may lead to gamers abandoning the franchise.

Call of Duty: Ghosts is outselling Battlefield 4 by a significant margin. According to VGChartz.com, Ghosts has sold 16.5 million copies across all platforms since its launch, compared to a less impressive 6.7 million for Battlefield 4. While it's not clear exactly how much of this gap is due to Battlefield 4's technical problems, it is clear that Call of Duty remains the king of the first-person shooter.

Big launches this year
EA has two big games set to launch later this year that are worth mentioning. The first is Titanfall, an online multiplayer, mech-style combat game set to release exclusively on Xbox consoles and the PC. The game is being developed by Respawn Entertainment and published by EA, and is set to release in early March.

There's quite a bit of hype surrounding the game, which received more than 60 awards at its E3 2013 reveal. This is Respawn Entertainment's first game, although the founders of the studio are former members of Infinity Ward, the studio responsible for Activision's Call of Duty series.

Titanfall is relying on Microsoft's Azure cloud infrastructure to run dedicated servers for the game, hoping to avoid connectivity issues that have plagued EA's SimCity and Battlefield 4. Azure allows Respawn to scale its resources as the number of players changes, hopefully preventing the huge number of players at launch crashing the system.

Microsoft offers developers access to Azure for a lower cost than renting servers, allowing Xbox One games to access thousands of servers in the cloud to offload certain computational tasks. This may end up giving the Xbox One a significant advantage over the PlayStation 4, but it's up to developers to harness that power.

Titanfall may end up being the next Halo for Microsoft, driving sales of the Xbox One and spawning a very lucrative franchise. The use of Azure essentially guarantees that the game won't be coming to Sony's PS4, and it provides a much-needed exclusive for Microsoft.

Another big game for EA is The Sims 4, the next iteration in the popular Sims series. It seems that EA has learned from its mistakes with SimCity and is not making The Sims 4 require an Internet connection to play.

The Sims 3, along with its myriad of expansion packs, sold millions of copies, and The Sims 4 has the potential to be a real cash cow for EA. That is, of course, assuming that EA doesn't have a repeat of the SimCity fiasco. The game is set to be released this fall.

The bottom line
EA's struggles will likely continue into 2014, although big launches like Titanfall and The Sims 4 may ease the pain. The problems with Battlefield 4 are causing delays in other games, and the reputation of the series has been seriously degraded by the abysmal launch. With top talent abandoning the company, it will be difficult for EA to return to its former glory.

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Read/Post Comments (8) | Recommend This Article (2)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On January 12, 2014, at 1:17 AM, BarakOsama wrote:

    There was an article today shilling for a newsletter from you guys giving examples of solid stocks to buy. One of the prime examples was Electronic Arts! This article proves that you are full of it. If you suppress my comment this proves that you are a bunch of phonies... Barak

  • Report this Comment On January 12, 2014, at 5:52 AM, deputyspade wrote:

    Azure is not why Microsoft got the game as an exclusive, it;s on the 360 as well and PC. Vince Zampella, the head of respawn studios, said they were working on a PS4 port of Titanfall and then Microsoft and EA did the deal for the game behind his back. Go read what he said about it on his twitter account. That's what happens when you sign a deal with the devil! Azure has nothing at all with the game being exclusive, it's all about money.

    You Motley Fool guys need to stop citing vgchartz as a sales source as well. That is not a reputable sales source at all. Wait for NPD numbers to come out for December next week.

  • Report this Comment On January 12, 2014, at 9:23 AM, Keegs79 wrote:

    Let's see, besides Titanfall there will be Dragon Age: Inquisition and at some point a new Mass Effect trilogy in the works. They also have Mirror's Edge 2 on the way. BF4 still has a huge and strong fanbase that is not going anywhere.

  • Report this Comment On January 12, 2014, at 10:48 AM, zotzmein wrote:

    Let’s not forget EA's forthcoming Star Wars titles. Though Battlefield 4 may have been boondoggled, Star Wars: Battlefronts built with Frostbite 3 has the potential of being stellar and potentially redemptive for the blundering publisher.

  • Report this Comment On January 12, 2014, at 2:52 PM, speculawyer wrote:

    I don't think Titanfall will be as big as the current hype. It is ONLY the MS platforms. It is ONLY multiplayer. And it only can handle a few players (12 I think).

  • Report this Comment On January 13, 2014, at 1:36 AM, Copyguy61 wrote:

    I'd just like to add, EA wants you to spend money to buy "speedboost" for the Need For Speed World game, but they are doing nothing about hackers that ruin the game.

  • Report this Comment On January 13, 2014, at 4:33 AM, ff7legend wrote:

    Why wasn't the botched ending to Mass Effect 3 listed here among the epic fails of EA? I knew once EA got their dirty hands on Bioware, they'd screw up the Mass Effect franchise & look what the fans of the Mass Effect series got. I've read where even some of the developers of ME3 weren't happy with the way ME3's ending turned out so they may be bringing back Commander Shepard after all. SimCity 5 is a total mess as is Battlefield 4. There's a reason EA has been labeled as the worst company in America, even worse than Bank of America, which is saying a lot, & that reason is EA's habitual shafting of their customer base. Activision has their own issues with Diablo III & it's failure for a launch a little over a year ago due to the very same issues that have plagued SimCity 5. Get rid of the "always on" internet DRM & problem solved.

  • Report this Comment On January 13, 2014, at 2:13 PM, OneSubset wrote:

    Serves EA right they have robbrd us the consumer for years I don't think Titanfall will be as big as they tink it will be BF4 is a better game that C.O.D. but both are riddled w/bugs. I hate the fact that Bioware is in bed w/EA so deeply Bioware wake up EA didnt support the 1st M.E. but when they saw the $$$ they jumped on board

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