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Electronic Arts' latest big bet, 'Anthem,' is receiving a tepid reception

Key Points
  • Hot off the heels of the success of its viral hit "Apex Legends," video gaming giant Electronic Arts (EA) released a highly anticipated new game last Friday, "Anthem."
  • Initial reviews for Anthem have been lukewarm.
  • Analysts appeared divided on that means for investors.
Game enthusiasts and industry personnel line up to test 'Anthem' during the Electronic Arts EA Play event at the Hollywood Palladium on June 9, 2018 in Los Angeles, California.
Christian Petersen | Getty Images News | Getty Images

Hot off the heels of the success of its viral hit "Apex Legends," video gaming giant Electronic Arts released a highly anticipated new game last Friday, "Anthem."

Initial reviews for the game were hardly enthusiastic. As of Feb. 25, the PC version of "Anthem" had an average critic score of 61 out of 100 on reviews aggregation site Metacritic. In comparison, the PC version for "Apex Legends" sat on a mean score of 88 on the same website.

Analysts appeared divided on what that performance means for investors in EA.

"For investors, this doesn't need to be a source of concern," Guilherme Fernandes, market consultant at video game market research firm Newzoo, said Friday in a note, adding that EA is a "highly successful company" overall.

"Investors should keep in mind that not every game will be a record-breaking hit, despite Apex Legends' very promising initial weeks. That said, their expectations will need to be shaped accordingly, bearing in mind that many of EA's revenues are generated by extremely popular yearly iterations such as its sports titles. Naturally, this is not a fool-proof guarantee of the company's future performance but there are no immediate signs of concern," Fernandes said.

Meanwhile, another analyst said the "poor" reviews for Anthem have already been priced into EA's stock.

"The chatter on issues with the game surfaced over the weekend, so the review scores are consistent with that," Michael Pachter, managing director of equity research at Wedbush Securities, said last Friday.

"EA has executed poorly all year (they expect $4.75 billion in revenue now and guided to $5.55 billion 9 months ago). Poor reviews for Anthem are consistent with their poor execution all year," Pachter said. He did, however, acknowledge that "Apex Legends" "is working phenomenally well."

EA did not immediately respond to a request for comment sent by CNBC outside regular office hours.

The "Anthem" release comes on the back of a rocky February for EA's stock, which was sent plummeting to an intra-month low of $80.21 per share early in the month after the company said it "did not perform" to expectations in its third quarter. It then bounced back days later to $106.84 per share off the success of "Apex Legends." The stock finished its trading day stateside on Friday at $95.92 per share.

EA 'made a mistake'

According to "Anthem" developer BioWare, which is owned by EA, the game allows players to team up with up to three others to "explore vast ruins, battle deadly enemies, and claim otherwordly artifacts" while wearing powered exoskeletons known as "javelins."

Prior to the release of "Anthem," BioWare had received critical acclaim in the past for its entries to franchises such as the science-fiction shooter "Mass Effect" and fantasy role-playing series "Dragon Age."

Unlike "Apex Legends," the multiplayer free-to-play shooting game which was launched by EA seemingly out of the blue in early February, "Anthem" followed a more typical release strategy that included an official unveiling a few years ago.

As a result, a significant audience was likely to have been introduced to "Anthem" before its launch, Piers Harding-Rolls, director of research and analysis director of games at IHS Markit, told CNBC prior to the game's release. He added that the introduction of any new franchise usually brings along with it a "significant amount of risk."

Wedbush's Pachter said EA "made a mistake" by allowing reviews of the PC version of Anthem to surface early. Although the official release of the game was on Feb. 22, subscribers of EA's PC-exclusive Origin Access Premier program were allowed to play the game a week earlier.

"My personal view is that this is just not a PC game — there is flying in the game, and maneuvering your flying character is like driving a car; the controls just don't work well for that on PC, and they work flawlessly on (video game consoles)," he said.

Pachter predicted the console reviews of "Anthem" will likely be 10 points higher on average than their PC counterpart. He described such a score as "still bad, but not a disaster."

— CNBC's Ryan Browne contributed to this report.

Clarification: This article has been updated to clarify that "Anthem" had an average critic score of 61 out of 100 on reviews aggregation site Metacritic.

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