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Why Electronic Arts' Stock Price Took a Dive on Wednesday

By Jose Najarro – Sep 17, 2021 at 9:30AM

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Online rumors of a game delay caused the stock price to go down.

Today's video focuses on Electronic Arts (EA -2.52%) and how its stock price dropped over 5% on Sept. 15, on rumors that its Battlefield game was going to be delayed. After the market closed on Wednesday, EA did confirm that the rumors were true. Regardless, the gaming market is still growing at solid levels, so the drop in stock price could be providing long-term investors with a buying opportunity. Here are some highlights from the video. 

  1. A report by The NPD Group shows that total video game sales in the U.S. grew 7% year over year (YoY) for August, and year to date have grown over 13%. Many investors are worried that gaming revenue would decrease as lockdowns ease throughout the country, but that is not the case when looking at YoY growth. 
  2. Battlefield 2042 has been confirmed as delayed until November. The original release date was Oct. 22. The incoming holiday season could be the prime reason for the drop in stock prices, as investors would have preferred an earlier date to allow consumers ample time to purchase the game for the holidays. 
  3. Originally, Battlefield 2042 would have been released before its competitor Call of Duty by Activision (ATVI -0.12%). With the date change, consumers will be able to buy Call of Duty first, which could be why Activision investors were so excited on Wednesday, causing the stock price to end in green.

Click the video below for my full thoughts and analysis. 

*Stock prices used were the closing prices of Sept. 15, 2021. The video was published on Sept. 15, 2021.


 

Jose Najarro has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Activision Blizzard. The Motley Fool recommends Electronic Arts. The Motley Fool has a disclosure policyJose is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through his link, he will earn some extra money that supports his channel. His opinions remain his own and are unaffected by The Motley Fool.

Stocks Mentioned

Electronic Arts Stock Quote
Electronic Arts
EA
$127.14 (-2.52%) $-3.28
Activision Blizzard Stock Quote
Activision Blizzard
ATVI
$76.24 (-0.12%) $0.09

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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