Last week, law firm Holzer Holzer & Fistel launched an investigation into video game publishing company EA over ambitions claims made surrounding a currently under-performing Battlefield 4.
After citing a significant drop in share value, yet another firm, Robbins Geller Rudman & Dowd LLP, has taken similar action, claiming that EA has violated the Securities Exchange Act.
The complaint claims EA “issued materially false and misleading statements highlighting the purported strength of the Company’s rollout of version 4 of its all-important Battlefield video game series, which had provided approximately 11% of its revenues in fiscal 2012.”
The firm insists that the following points were hidden from investors:
“(a) Battlefield 4 was riddled with bugs and multiple other problems, including downloadable content that allowed players access to more levels of the game, a myriad of connectivity issues, server limitations, lost data and repeated sudden crashes, among other things;
“(b) as a result, Electronic Arts would not achieve a successful holiday season 2013 rollout of Battlefield 4;
“(c) the performance of the Electronic Arts unit publishing Battlefield 4 was so deficient that all other projects that unit was involved in had to be put on hold to permit it to focus its efforts on fixing Battlefield 4; and
“(d) as a result, Electronic Arts was not on track to achieve the financial results it had told the market it was on track to achieve during the Class Period.”
A conclusion from either investigation has yet to be drawn.
Currently, Battlefield 4 developers DICE are focusing efforts on bug fixing. Patches for the PlayStation 4, PlayStation 3 and Xbox 360 were rolled out yesterday with a significant PC update that launched one day prior. More are expected as we speak.
With that, we want to ask you, do you think the situation has been blown out of proportion, or did EA get what was coming? What outcome do you anticipate from these investigations?