Videogame publisher EA’s holiday-quarter sales forecast misses estimates

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(Reuters) – Electronic Arts Inc’s (EA.O) revenue forecast for the keenly watched holiday quarter narrowly missed estimates on Tuesday amid expectations of tough competition from other games that are likely to release around the same time.

Shares of the videogame publisher, that closed up nearly 2 percent, were down 3.7 percent in after-hours trading.

The company forecast third-quarter adjusted revenue of $2 billion, a tad lower than the analysts’ average estimate of $2.01 billion, according to Thomson Reuters I/B/E/S.

EA’s holiday quarter launches include “Star Wars Battlefront II” on Nov. 17 and “Need for Speed Payback” on Nov. 10. Rival Activision Blizzard Inc’s (ATVI.O) slate for the holiday season includes “Call of Duty: WWII.”

Activision’s personal computer version of the smash hit “Destiny 2”, which was launched on Oct. 24, will also drive competition in the December quarter.

The company has indicated it expects “Star Wars Battlefront II” to replicate the success of the previous version that sold over 14 million units in the fiscal year 2016.

Sales at EA’s high-margin digital business rose 21.7 percent to $689 million in the second quarter ending Sept. 30 as more gamers bought their titles online instead of purchasing physical copies from retail stores.

The company’s net loss narrowed to $22 million, or 7 cents per share, from $38 million, or 13 cents per share, a year earlier.

EA’s revenue rose nearly 7 percent to $959 million in the quarter, driven by sales of its latest editions of its popular sports titles such as “Madden NFL” and “FIFA”.

On an adjusted basis, the company’s revenue of $1.18 billion was in line with analysts expectations.

Videogame companies are required to defer some revenue from certain online-enabled games following a tweak to the U.S. accounting rules.