Electronic Arts (EA) has projected annual bookings below expectations as gamers reduce spending

The company’s stock declined by 2.5% in after-hours trading.

EA also approved a new three-year stock buyback program totaling $5 billion.

“Implementing buybacks will help mitigate some of the near-term negative sentiment, but game publishers should be focused on a rebound once the next console generation arrives,” said Joost Van Dreunen, a lecturer at NYU’s Stern School of Business.

EA’s pessimistic forecast adds to the already dim outlook for the industry, which has been grappling with gamers scaling back on discretionary spending amid high inflation.

Major companies, including Sony of Japan and Take-Two Interactive, the maker of “Grand Theft Auto,” have been aggressively reducing costs in recent months to navigate economic uncertainty and declining demand for games.

In February, EA downsized its workforce by 5% as part of a restructuring initiative that also involves shrinking its office footprint.

According to data from LSEG, the company expects bookings for fiscal year 2025 to range between $7.30 billion and $7.70 billion, falling short of the average analysts’ estimate of $7.76 billion.

For the fourth quarter, EA reported bookings of $1.67 billion, which missed expectations of $1.77 billion. The company also produces games like “Star Wars Jedi: Survivor.”

“EA’s development pipeline remains robust, though the timeline is a point of concern,” noted Joe Brunetto, an analyst at Third Bridge.

He added that new titles such as Star Wars could contribute to long-term growth.

EA anticipates bookings for the first quarter to be in the range of $1.15 billion to $1.25 billion, compared to estimates of $1.44 billion.

On an adjusted basis, EA reported earnings of $1.37 per share in the fourth quarter, below estimates of $1.52 per share.

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