When Electronic Arts (NASDAQ:EA) unveiled Anthem at the E3 video game expo last year, the company surely hoped that the game would set a new standard for online multiplayer shooters and go on to be a major franchise in its catalog. The title was the latest project out of BioWare, the highly regarded studio known for games in the Mass Effect and Star Wars: Knights of the Old Republic series, and there was excitement to see what the developer would do with its first new intellectual property (IP) in years.
Video games can now be easily updated post-release, so comebacks are possible. But it now looks like Anthem is on track to be a dud. If it does go on to underperform, it would be a significant setback for Electronic Arts and the latest in a string of recent misfires. Even so, Anthem probably isn't the EA game that investors should be most focused on.
Anthem appears to be on track to disappoint
Games are built to be sustained over the long term now, but Anthem's early post-release sales tracking is uninspiring, and the title's core gameplay appears unlikely to lure in the player base needed to produce a winner for EA. Despite indications from Electronic Arts and BioWare that interest in the game was exceeding expectations, signs emerged that it was in danger of underperforming as it got closer to release. And that now appears to be the likely outcome.
The company made a trial version of Anthem available roughly a month before release, and while the game did find some fans, the overall reaction from people who played it was less than favorable. Online communities criticized the game's aesthetic and general style, and the title never really managed to build the hype that typically mounts in the lead-up to a big game's debut.
Hope that the title would be significantly improved by its release date can apparently be set aside, as early fan reactions are largely negative and professional critics appear to be writing the game off as mediocre. BioWare's latest has an aggregate review score of just 60% and has been recommended by just 14% of critics, according to the review site OpenCritic.
Anthem posting disappointing sales is significant. BioWare has generally been viewed as one of the most talented and creative studios within Electronic Arts, but its recent track record suggests magic has been lost at the development house. After a string of high-profile underperformances including Star Wars Battlefront II, Battlefield V, and FIFA 19, EA entered this year starved for hits. Shareholders should know that Anthem is unlikely to be the company's savior.
It was the wrong game at the wrong time. The project borrowed certain gameplay and design elements from Activision Blizzard's Destiny games, and it was likely conceived as a competitor to that franchise. Development almost certainly started when fortunes looked hot for the Destiny franchise, but by the time Anthem was ready for release, market tastes had shifted -- and the Destiny property has declined to the point where Activision no longer sees fit to support it.
Many reviewers have dinged Anthem for being light on content -- one of the chief complaints that has saddled the Destiny franchise. This weakness suggests Anthem may have had a hard time even if gamers were clamoring for more Destiny-style experiences. But its outlook is dimmer now that customer tastes appear to have shifted.
Check out the latest earnings call transcripts for Electronic Arts.
Saved by Apex Legends
Electronic Arts has had difficulty delivering consistent success with its original IPs. The company typically generates strong performance from FIFA and Madden sports franchises in addition to other licensed properties, but there are reasons to be concerned that the publisher has become overly reliant on other people's IPs.
Thankfully for the company and its shareholders, EA has scored a major new hit early in 2019. The company's surprise release of Apex Legends in early February has proven very successful, and the franchise looks like it will have a long shelf life.
EA's Apex Legends is the first game in the battle-royale genre that seems to be taking steam away from Epic Games' massively popular Fortnite. Apex managed to amass a base of more than 25 million players just a week after its release, and it still has plenty of wind in its sails. The game is available for a free download, but with a large player base, EA should be able to leverage microtransactions at a scale similar to the way that Epic has turned Fortnite into a cash machine. Apex Legends is exactly what EA needed, and overshadows the likely failure of Anthem.
Anthem was positioned as the company's big 2019 release and looks like a dud. But with Apex seemingly coming from out of nowhere and primed to be a big hit, Electronic Arts' overall outlook has improved.