Electronic Arts forecasts lower annual bookings as gamers cut back amid high inflation
May 7 (Reuters) -Video game publisher Electronic Arts EA.O forecast full-yearbookings belowWall Street estimates on Tuesday,hit by weak spending on its flagship titlessuch as "FC 24" and "Madden NFL 24" amid an uncertain economic outlook.
The Redwood City, California-based company also authorized a new three-year stock buyback plan totaling $5 billion.
The dour forecast from EA, one of the biggest names in gaming, will add to the industry's already gloomy outlook, which has been coping with gamers cutting back on discretionary spending amid high inflation.
Large firms, including Japan's Sony 6758.T and "Grand Theft Auto" maker Take-Two Interactive TTWO.O, have been aggressively cutting costs in recent months to combat the economic uncertainty and slumping game demand.
Analysts from Roth MKM had warned about the company's outlook in a research note last week citing a lack of visibility into EA's development pipeline and lighter release schedule.
EA also cut its workforce by 5% in February as part of a restructuring plan, which includes a reduction in office space.
The company forecast fiscal year2025 bookings in the range of $7.30 billion to $7.70 billion,compared with average analysts' estimate of $7.76 billion,according to LSEG data.
For the fourth quarter, the company, which also makes games like "Star Wars Jedi: Survivor", posted bookings of $1.67 billion, missingestimates of $1.77 billion.
For the first quarter the company expects bookings in the range of $1.15 billion and $1.25 billion,compared with estimates of $1.44 billion.
On an adjusted basis, the company earned $1.37 per share in the fourth quarter,compared with estimates of $1.52 per share.
Reporting by Zaheer Kachwala in Bengaluru: Editing by Tasim Zahid
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