Electronic Arts cut sales outlook as older games struggle

EA "The Simpsons" game launch Image copyright Getty Images
Image caption Electronic Arts is focusing more on digital offerings such as "The Simpsons Tapped Out"

US video game publisher Electronic Arts (EA) has cut its full-year sales outlook after reduced demand for older gaming console titles ate into profits.

The stock fell by more than 3% in extended US trading on Tuesday.

The firm, which makes the popular Fifa football and Battlefield multi-shooter games, lowered its 2015 revenue forecast to $3.9bn (£2.4b) from $4bn.

However, it reported a better-than-expected profit of $398m for the three months ending in December.

This was partly due to a 27% increase in digital revenues from titles such as Madden NFL Ultimate Team and The Simpsons Tapped Out.

The California-based company has been focused on increasing sales of its digital games, which earn higher margins compared to traditional packaged console games.

EA chief executive Andrew Wilson said the company was having to cater to "a new generation of games".

"In addition to consoles, our mobile games, digital downloads and live services are growing year-over-year," he said in a statement.

User transition

Game makers such as EA, Sony and Nintendo have been grappling with what some herald as the end of the traditional video game.

Image copyright AFP
Image caption Sales of older game consoles such as the Xbox 360 have dropped dramatically

In recent years, sales of older, traditional machine consoles such as the Microsoft Xbox 360 and Sony PlayStation 3 have dropped as users switch to playing games on their smartphones and tablets.

As a result, the gaming industry has been shifting more of their resources to web software as less shoppers buy console hardware.

Analysts say another strategy includes releasing fewer but bigger next-generation game titles.

EA for example, plans to release science-fiction shooter game Titanfall as an exclusive title for Microsoft's Xbox consoles and personal computers in March.

Over the next two years, it is also expected to release games licensed from Walt Disney's Star Wars franchise.

Rivals such as Sony, which makes the PlayStation 4, is also offering franchised material and exclusive games such as Infamous: Second Son and Transistor.

Microsoft, which makes the Xbox, is developing exclusive content and applications such as the next instalment of Halo, a game linked to a forthcoming TV show.

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