What You Missed This Week in Video Games

EA to lay off roughly 5% of its workforce in overhaul

“Game On” is The Fly’s weekly recap of the stories powering up or beating down video game stocks.

NEW RELEASES: 

This week’s most notable new release is Take-Two’s (TTWO) professional wrestling game “WWE 2K24,” which comes out March 8 for PlayStation 5 (SONY), PS4, Nintendo Switch (NTDOY), Xbox One (MSFT), and Xbox Series X/S. Also out this week is Atlus’ (SGAMY) tactical role-playing game “Unicorn Overlord,” which launches March 8 for PS5, PS4, Xbox Series X/S, and Switch.

EA RESTRUCTURING: 

Last week, Electronic Arts (EA) said in a regulatory filing that its board of directors approved a restructuring plan focused on aligning its portfolio, investments, and resources in support of its strategic priorities and growth initiatives. “These actions are consistent with the company’s ongoing focus to deliver against its long-term strategy to drive durable growth, strong cash-flow, and stockholder returns,” the company said in the filing. “The Plan reflects actions driven by portfolio rationalization, including costs associated with licensor commitments, as well as reductions in real estate and headcount, impacting approximately 5% of the company’s workforce.”

The company noted that it estimated that it will incur approximately $125M-$165M in total charges in connection with the Plan. These charges consist of approximately $50M-$65M associated with office space reductions, approximately $40M-$55M related to employee severance and employee-related costs, and $35M-$45M in costs associated with licensor commitments. Of the aggregate amount of charges that the company estimates it will incur, the company expects that approximately $105M-$150M will be future cash expenditures. The actions associated with the Plan are expected to be substantially complete by December 31, 2024.

As part of the restructuring, EA’s “Star Wars” first-person shooter by Respawn is being canceled, IGN’s Rebekah Valentine reported. EA Entertainment Laura Miele told staff in a note about the company’s business priorities going forward, the author noted. “It’s always hard to walk away from a project, and this decision is not a reflection of the team’s talent, tenacity, or passion they have for the game,” Miele wrote. “Giving fans the next installments of the iconic franchises they want is the definition of blockbuster storytelling and the right place to focus.” The team previously working on that “Star Wars” title will be reassigned to other projects, includding “Apex Legends,” “Iron Man,” “Black Panther,” and the upcoming sequel to “Jedi: Survivor,” the author said.

‘FINAL FANTASY’ U.K. SALES: 

U.K. boxed sales of Square Enix’s (SQNXF) “Final Fantasy VII Rebirth” in its launch week is 30% lower than that of 2020’s “Final Fantasy VII Remake,” Gamesindustry.biz’s Christopher Dring reported, citing data from GfK. Dring noted that the “Remake,” which is the predecessor to “Rebirth,” released during the peak of COVID-19 lockdowns.

OTHER STORIES TO WATCH:

• EA’s upcoming RPG “Dragon Age: Dreadwolf” may come out in late 2024, Insider Gaming reports [read more]
• Take-Two’s Rockstar Games has asked staff to return to office five days a week, Bloomberg says [read more]
• Ubisoft (UBSFY) said that its recent release “Skull and Bones” achieved record player engagement since launch, though declined to say how many units its sold or its player count, IGN reports [read more]
• Activision’s Toys for Bob unit will spin off to become an independent studio [read more]
• “Call of Duty: Warzone Mobile” will launch worldwide on March 21 [read more]

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Originally Posted March 5, 2024 – What You Missed This Week in Video Games