The Wall Street Journal: EA takes a hit after delay in planned ‘Star Wars’ video game

Electronic Arts Inc.’s sudden decision to put a highly anticipated “Star Wars” game on ice drew sharp questioning over how the company plans to monetize it, and raised concerns on Wall Street about the impact to next year’s fiscal earnings.

EA

EA, -2.43%

  said it is shuttering Visceral Games, a Redwood City, Calif., studio tasked in 2014 with creating a story-driven game set in the “Star Wars” universe. The company had recruited industry veteran Amy Hennig to lead the project and draw on her experience producing “Uncharted,” a popular action-adventure series published by Sony Corp.

SNE, +1.38%

 

The surprise decision to put the game on hold indefinitely — it originally was due in late fiscal 2019 — comes as publishers in the console segment of the $100 billion video game industry experiment with new ways to make money off blockbuster titles.

Morgan Stanley lowered its outlook for fiscal 2019 per-share earnings by 8% to $5.36 and cut its price target on EA stock by $2 to $126 in light of the delay. Wall Street thwacked the shares, which were up 38% from a year ago as of Tuesday’s close. The stock Wednesday slid 3.4% to $113.

An expanded version of this report appears on WSJ.com.

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