EA pre-announced its quarterly earnings results on January 22nd, offering a sobering look at the company’s current growth.

With net bookings expected to hit around $2.22B, a 10.3% decline at the midpoint from prior guidance, it marked a setback in a year already marked by challenges. The subsequent drop in EA’s stock price by 16.7% was one of the company’s largest ever one-day declines.

EA is facing stagnation, with the past 12 months of bookings sitting below levels seen in fiscal years 2022-2024. This lack of growth not only reflects EA’s challenges but also mirrors the broader gaming industry — EA’s issues are far from unique, but still concerning for a company of its size.

Prior to the earnings pre-announcement, EA traded at 40 times its LTM earnings, compared to 26 times for the broader S&P 500, of which it is a constituent. Investors had come to expect robust growth from live services, which instead posted 1% growth in FY24, and will likely post 1-2% growth in FY25 (essentially below inflation).

Furthermore, after initially guiding for mid-single digit growth for its fiscal year ending March 31 2025, the company is now pointing toward a mid-single digit decline in revenue. It attributed its poor results for the quarter to weak sales of the new Dragon Age title and EA Sports FC 25 revenue, which we’ll explore more below.

The actual quarterly results on February 4th saw EA recover some of this decline, rising 7.6% the next day after the company announced a $1B accelerated share repurchase plan, amounting to over 2% of its market cap. Earnings per share beat analyst expectations, which were overly pessimistic.

EA began disaggregating live service from its full game revenue in 2019 and has noted the growth of live service from $3.16B to $5.55B from 2019-2024, an impressive 12% CAGR. In comparison, full game sales have been relatively flat. As a result, live services now make up 73% of EA’s topline, up from 64% six years ago.

While services growth over the past six years — barring the onset of COVID-19 in 2020 — has been robust, this line item is still reliant on successful game releases. Unlike companies that have fully integrated live service models like Epic Games’ Fortnite or Bungie’s Destiny 2, EA still relies on annual installments of its blockbuster soccer franchise.

Let’s dive into some of the challenges EA faced this quarter and what may be next for the gaming giant.

Dragon Age: The Veilguard

Unit sales for the new Dragon Age dramatically missed the mark, reaching 1.5M players, or about half what EA had projected internally.

For context, Dragon Age (DA) is one of BioWare’s longest-standing franchises and has now had four tentpole releases — DA: Origins (2009), DA II (2011), DA: Inquisition (2014), and DA: The Veilguard (2024). But to understand the expectations behind DA: The Veilguard, it is important to understand the success of DA: Inquisition.

At launch, DA: Inquisition was not only received really well by critics, but it was also nominated for a flurry of awards, including game of the year, and received a ton of positive press. On the back of that great launch momentum, it has gone on to sell 12M lifetime units as of September 2024, thereby making it and the DA franchise one of the most successful in BioWare’s history. Given this success, it makes sense why EA/BioWare would decide to launch a new series title.

However, it should be noted DA: Inquisition was launched about 10 years ago, which arguably was not only during a golden age for open-world action RPGs (on the back of Fallout 3 in 2008, Borderlands in 2009, Fallout: New Vegas in 2010, and Skyrim in 2011), but also a less competitive one. If unit sales for DA: The Veilguard fell short by 50%, it could simply be a case of EA grossly overestimating pent-up demand for a new DA title, or underestimating the impact of the growth of competition (and therefore the table stakes) in the genre, or misunderstanding the genre’s evolving audience needs.

In terms of the game itself, DA: The Veilguard was fairly well received by critics and currently sports "mostly positive" reviews on Steam. But some players felt the story lacked the depth and complexity of earlier installments, and there were also criticisms of the simplified combat. Controversy around “woke” dialogue and character creation may have also affected sales with some segments of the audience.

But most distinctly, the game seems to be facing some critical medium- to long-term engagement issues, which naturally has an impact on long-term unit sales momentum. This can be seen in the Steam CCU graph below, where Veilguard’s CCUs are swiftly moving toward Inquisition’s 10-year post-launch baseline.

From a production standpoint, the game has been stuck in “development hell” since 2015. BioWare veteran Mike Laidlaw was creative director until he departed in 2017, and there was further turnover in subsequent years. The game pivoted a second time after Gary McKay took over Bioware in 2020. He made the critical decision to focus on single player after EA’s supposed attempts to turn DA: The Veilguard into a live service multiplayer game.

BioWare laid off approximately 50 people in August 2023, leaving few DA veterans in the company — a factor that was critical to DA: Inquisition’s success. And just last month, the remaining Dragon Age developers transitioned to other roles at EA. Active development ended with these final transitions, and the game will not receive DLC or post-launch content, like prior installments.

CEO Andrew Wilson pointed to the disparity between the target audience and critics on the February earnings call: “In order to break out beyond the core audience, games need to directly connect to the evolving demand of players who increasingly seek shared world features and deeper engagement alongside high-quality narratives in this beloved category. Dragon Age had a high-quality launch and was well-reviewed by critics and those who played. However, it did not resonate with a broad enough audience in this highly competitive market.”

In other words, it seems like he’s suggesting the game would have done better if it were a live service title. However, this appears to be the wrong lesson learned, given the game’s turbulent development history and what the core fanbase is actually complaining about. For example, making Dragon Age a live services title doesn’t really change how simplified the combat mechanics feel.

DA: The Veilguard’s failure spelling bad news for Mass Effect 5 remains to be seen, especially given the changes made to the BioWare team. Even though BioWare games are not typically live service titles, the studio still is a meaningful part of EA’s full game revenue, which comprises a quarter of its top line. It will be interesting to see how EA’s management handles BioWare and its franchises from here.

EA Sports FC

EA’s other major launch of the quarter was EA Sports FC 25 (FC 25). Like DA, critics weren’t unusually negative about the game: The PS5 release sports a 76 Metascore, while users on the PlayStation Store rate it an average of 3.3/5 stars.

As you may recall, EA decided to forego paying the FIFA license following FIFA 23, which led to the EA FC branding and higher cost savings as a result. FC 24 sold in line with its predecessor, owing to a massive marketing campaign that caused the game to become “unavoidable to anyone who watched football in the latter half of the year,” according to PC Gamer.

The problems facing EA FC 25 might not just be limited to reduced marketing, which was not sustainable in perpetuity. Reviews suggest many players feel FC 25 offered less groundbreaking features compared to its predecessor. Gameplay felt slower, and menus were described as “strikingly similar” to the previous game, with some even noting the graphics appeared unchanged. The game also experienced a flurry of technical problems, including glitchy menus and crashes when accessing certain features like the store or squad building challenges. Individually, these might seem like small player complaints. But when put together, they build an overall impression for the consumer that starts to impact unit sell-through rates.

FC 25 is already on sale, though, and as of the time of writing, is currently 60% off on the PlayStation store. EA is likely hoping to boost live service revenue by offering the full game at a discount, given the importance of the live service KPI for investors. If services start to flag, it may mean its Ultimate Team breadwinner is facing fatigue as well.

When plotting EA’s “extra content” TTM revenue (a major contributor of which is FC’s Ultimate Team) since Q1 2019, this more recent fatigue becomes a bit more apparent. While a full deep dive into how Ultimate Team has changed over the years to boost monetization is out of this article’s scope, it is important to note EA has seen similar fatigue before, as showcased in the graph below between Q3 2020 and Q2 2021. EA implemented various feature improvements and monetization-pushing additions to Ultimate Team in the following annual releases, which ultimately drove up “extra content” revenues. It will be interesting to see whether EA can pull it off again with FC 26 and beyond.

Broadly, when EA’s leading franchise is growing, it reflects well on the company’s results as a whole. However, when EA FC hits speed bumps, EA hits them too, exposing the company’s rising concentration risk, in which fewer big franchises have driven more of its bookings in recent years.

Apex Legends

Apex Legends (Apex) was mentioned on the latest earnings call as a source of bookings decline, though it performed “in line with expectations.”

Launched in 2019, Apex is one of EA’s only true live service titles, with the game now in its seventh year. But Wilson also noted the franchise “has not been headed in the direction that [EA has] wanted for some time.”

Apex suffers from a lack of new events, collaborations, crossovers, cosmetics, maps etc. — all factors which have contributed to rival game Fortnite’s longevity. Apex has also not released a new character since May 2024, whereas previously a new character was seen every three months. There is a growing sense of stagnation in the gameplay, and it has contributed to a longer-term decline in the player base.

On top of that, the shooter genre is more competitive than ever. Not only are older behemoths like Fortnite, PUBG, and Call of Duty delivering exceptional live services experiences, but also new title launches like Helldivers 2, Space Marine, and Marvel Rivals all compete for the limited time that Apex’s target player base has. Simply put, the bar for Apex to stay relevant long term is rising by the day, and if its player base gets a whiff of stagnation, EA shouldn’t be surprised about losing those players to competing shooter experiences.

According to TwitchTracker, Apex Legends’ Twitch viewership saw an 18-month peak between 2021 and 2022 (notwithstanding launch). Today, the number of channels streaming the game and the number of viewers have both declined by about two-thirds.

Wilson pointed to a major Apex update he dubbed "Apex 2.0" as a way to revive interest, but it’s unclear what exactly that means. Like BioWare, Apex developer Respawn has also faced turnover, with high level developers Chad Grenier and Jason McCord both leaving the studio in late 2021. The broader team was also hit with layoffs in March 2024.

While Wilson hopes Apex experiences a grand revival, it’s not clear from the outside who at Respawn will spearhead this change. It also puts more pressure on the upcoming Battlefield game (likely launching before mid-2026), which also finds itself in a more crowded shooter market than ever before.

Conclusion

EA's struggles highlight a broader trend of stagnation, both within the gaming industry and within the company itself. Underwhelming results from the new Dragon Age title illustrate EA's challenges with new game development and the difficulties that come with restructuring internal studios. Plus, as EA Sports FC and Apex Legends show signs of fatigue — even in the face of new wins like EA Sports College Football 25 — EA’s reliance on a few major franchises is now worth a conversation.

A sluggish market is undoubtedly a headwind, but EA has the resources, talent, and market position to adapt. Perhaps the company needs to think more about adding new growth vectors, being more open to non-live ops titles, rejuvenating its mobile efforts, or even seeking out more M&A after its acquisition of TRACAB Technologies (which is intended to give EA FC a boost).

EA continues to be massively profitable and engage enormous audiences — but maybe this quarterly reaction can catalyze an even more diverse, long-term growth plan.

A Word from Our Sponsor: OVERWOLF

Integrate Safe UGC into Your Game with CurseForge For Studios

Overwolf is an all-in-one platform that lets creators build, share, and monetize in-game apps, mods, and private servers. With over 178K creators and 100M monthly active users, Overwolf supports the world’s most popular AAA titles such as League of Legends, Minecraft, World of Warcraft, and 1,500 other games.

For game developers, Overwolf offers CurseForge For Studios. CurseForge For Studios is a white-label solution that lets game makers and publishers easily integrate mods safely and seamlessly into their games, both existing and new, at zero cost. It’s battle-tested by AAA studios and games, including Krafton (inZOI), Studio Wildcard (ARK), TakeTwo Interactive (KSP), and others.

CurseForge For Studios offers:

• Cross-Platform Modding: Integrate Overwolf’s open-source SDK and plugins to let players discover and install mods in-game, across all platforms and storefronts
• Moderation to Ensure Safety: Studios define policies and guidelines on what is permitted, with Overwolf ensuring that only authorized and appropriate content is published 
• Creator Relations and Payments: CurseForge supports creators with monthly payments, equity investments, developer contests, and hackathons to kickstart content creation for your game
• Harness Existing Creator Community: Tap into the creative expertise and knowledge of a passionate community of 178K creators
• Premium Mods Integration: Crafted by game studios and select community modders, Premium Mods offer players a next-level modding experience through guaranteed high-quality content, while offering creators a powerful new revenue stream

Content Worth Consuming

The Big Game Engine Report of 2025 (VGinsights.com): “The game engine space has been changing rapidly with strong established public engines winning share from historically dominant custom game engines. This report explores the game engines used in games released on Steam over time. Unity, Unreal Engine and custom game engines of large AAA studios continue to dominate the game engine market. However, the trends have been shifting significantly over the last 10 years, especially so in the last 5.”

The Future of 4X Games: FirstFun's Surprising Billion-Dollar Strategy (GameMakers Podcast): “Join gaming industry veterans as they break down the unprecedented transformation of mobile 4X games. Featuring insights from Joseph Kim (Lila Games), Justin Yau (Wharton MBA), UA specialist Matej Lancaric (2.5 Gamers) and game design specialist Jakub Remiar (2.5 Gamers) on how Chinese gaming companies are achieving $8M+ daily revenue through innovative UA strategies and product design.”

Gaming Will Revitalize Consumer Investing (Konvoy's Weekly Newsletter): “Over the past decade, venture capital firms have increasingly shifted away from investing in the consumer sector. In 2024, only 6% of all VC investment dollars went into the consumer sector from the top 100 most active VC firms (see chart above from SVB). Thinking about the last 5+ years (setting game titles aside), the last great consumer app that truly has taken off in mass adoption has been ChatGPT. Before that, a few others worth highlighting were TikTok (2016), Discord (2015), Robinhood (2013), Coinbase (2012), Snapchat (2011), Instagram (2010), WhatsApp (2009), Uber (2009), Spotify (2008), Zillow (2006), and the list goes on. Many of these are Forever Apps (which we did a deep dive on in 2023) or short-term apps, which are also very lucrative consumer investments.”

Bobby Kotick, Former CEO of Activision Blizzard, and Bing Gordon, Advisor at Kleiner Perkins (Kleiner Perkins' YouTube Channel): “In 2020, when President Trump signed the executive order that would ban TikTok in the U.S., Bobby Kotick called his old friend Steven Mnuchin. The former Secretary of the Treasury told him that, if TikTok’s U.S. operations were to be sold to an American company, Microsoft would be the only bidder. A couple calls later, he reached ByteDance founder and CEO Zhang Yiming, who said he’d rather sell to Bobby than Microsoft. Concerned about his ability to get the deal done solo, Bobby called Microsoft CEO Satya Nadella and offered to make a joint bid. Nadella declined, but added, “ if the deal doesn't get done, we should sit down and talk about us buying Activision.” TikTok currently remains Chinese-owned, but three years later, Microsoft paid $75 billion for Activision Blizzard.”

Tetris Creator, Alexey Pajitnov (The AIAS Game Maker's Notebook): “Adam Orth chats with Tetris creator Alexey Pajitnov. Together they discuss his early life with computing and how he first created Tetris; his ideas behind real-time versus turn-based puzzle design; ideas he scrapped from early development; distributing Tetris outside of the Soviet Union; his work on titles outside of Tetris and the pressure his first creation put on his subsequent work; and what he hopes for the future of Tetris.”

How Likely Are You to Overcome a Failed Launch? That Low? So You Are Telling Me There’s a Chance! (howtomarketagame.com): “Congrats, you launched your game…but it didn’t sell very well. Maybe you got 50-something reviews in the first month. Reviews are positive but you didn’t make back enough to really justify development cost. So now you are wondering, how do you market your game to boost sales and maybe turn this game around to be a bestseller? I mean, Among Us did it! No Man’s Sky did too! ”

Our Product Consulting Services

With our full life cycle product and design services, Naavik is a remote product team in your back pocket. Whether it’s core/metagame concepting or feature design, economy modeling or gameplay balancing, monetization design or live ops experimentation, we’ve helped game teams across platforms and genres to significantly elevate their game’s KPIs. Here’s what one of our clients had to say.

If you’d like to learn more, reach out here. Also check out our expanded consulting service portfolio here.