By Zaheer Kachwala
(Reuters) -Electronic Arts missed estimates for quarterly bookings on Tuesday, as lower spending and stiff competition hurt demand for its gaming titles.
Shares of the company fell more than 2% in extended trading.
Still-high interest rates causing gamers to tighten spending and stiff competition in the video game industry have hit the sales for EA's gaming titles such as "Star Wars Jedi: Survivor" during the holiday quarter.
Amid an uncertain economic outlook, video game publishers are competing for top spots with games such as "Call of Duty: Modern Warfare 3", published by Microsoft (NASDAQ:MSFT)'s Activision Blizzard (NASDAQ:ATVI), and Nintendo's "Super Mario Bros. Wonder" dominating sales for the month of December, according to market research firm Circana.
Wedbush Securities analyst Michael Pachter attributes the results to the lack of big titles released in the December quarter and a tough comparison to the year earlier.
"They had to compare to last year's (2022) launch of "Need for Speed", and that creates a $150 million hole in the portfolio... I'd say this is what we should expect without any big new games," Pachter added.
However, bookings for the company's revamped soccer franchise, "FC 24", grew 7% year-over-year compared with the previous edition.
EA reported bookings of $2.37 billion for the quarter ended Dec. 31, missing analysts' estimates of $2.39 billion, according to LSEG data.
The company forecast fourth-quarter bookings in the range of $1.63 billion to $1.93 billion, the midpoint of which is below analysts' expectations of $1.83 billion.
It reported adjusted profit of $2.96 per share compared with estimates of $2.93 per share.
The company also nudged up its annual profit forecast to $4.21 to $4.68 per share from its previous projection of $4.10 and $4.66.