Another game release, another lawsuit. This really should just be EA's tagline at this point. From problems with the NCAA (and canceling the game) to suing Zynga for being a look-a-like, the company is always involved in some sort of legal matter. Now, a class-action lawsuit has been filed, with EA coming under fire for both the still-broken state of Battlefield 4, as well as alluding to false success of the game, with EA employees then selling off stock to the tune of over $12 million.
The letter of complaint (PDF in the source link below) says EA knowingly hid the game-breaking issues in the online mode of the company's latest first-person shooter. Don't remember what was said? Here's a few excerpts from a July earnings and investor conference call prior to the game's launch.
In summary, EA is in very good shape. We are executing on a clear set of goals for leadership on mobile, PC, current-generation systems and next-generation consoles. The big bets we've made with blockbusters like... Battlefield 4... are resonating with critics and consumers.
We could say that at the end of July, perhaps the developers were unaware of some problems or even that the team could probably fix some issues before launch. Naturally, statements like that caused stocks to rise, and right before EA's annual meeting on July 31st, five EA executives sold off over 150,000 shares of stock, totaling $4.8 million. Perhaps the team was more aware of problems than previously thought.
Then, during a call later in the year, EA said that Battlefield 4, to date, was more successful than the previous iteration of the franchise, and also mentioned that "our team is battle-tested and ready, and today we are sending our ace, Battlefield 4, to the mound." EA's executive VP of games, Patrick Soderlund, toted the shooter as an overall positive experience, mentioning reviews from the likes of Machinima and Joystiq reaching 9 and 9.5. So on the close of day for October 29th, stocks rose to $26 per share, leading three more EA executives to sell off almost 325,000 shares over the next ten days, for nearly $8.5 million.
The suspicious trading aside, the mood of EA has changed from when the company was boasting about its game prior to launch. Earlier this month, noting all of the broken elements of the multiplayer mode of the game, EA said that it has stopped working on DLC content for both Battlefield 4 and Star Wars and that,
To bring it full circle, the complaint also mentions that from back in August, after a high price of $27.97, EA's stock value has dropped more than 25 percent, with the majority of the loss coming within a month after the launch of the game. I can't fault investors for leaving, especially after one of the year's most anticipated games has succumb to server errors, disconnections, bugs causing consoles to freeze or crash, and game-breaking glitches. Some of the server issues even feel like the botched SimCity launch, and that's never a good feeling to get twice in a year, let alone from the same publisher.read more...