Instant Analysis: Electronic Arts' "Titanfall 2" Looks Like a Sales Dud

Image source: Electronic Arts.

Early sales indicators for Titanfall 2 from Electronic Arts (NASDAQ: EA) point to the game being a disappointment for the company. The game landed as the fourth best-selling title in the most recent U.K. weekly chart, falling short of EA's own Battlefield 1 -- which claimed the top spot for the second straight week since its launch. Titanfall 2 also came in below the company's FIFA 17, which released in Europe on Sept. 29.

With video game sales typically being highly front-loaded, Titanfall 2's failure to secure better performance on the U.K. charts in the week of its release is concerning, and negative indicators are not limited to the territory. Research firm Cowen & Company cut its global sales target on the game from 9 million units to between 5 million and 6 million units, and online feedback suggests that the game had a small enough player base after launch to make matching with other players difficult in some game modes.

The game appears to be suffering negative effects from releasing just one week after EA's own Battlefield 1 and one week before the debut of Call of Duty: Infinite Warfare from Activision Blizzard (NASDAQ: ATVI).

Does it matter?

Substantial underperformance for Titanfall 2 will negatively affect EA's earnings in its most important quarter, and could cause the company to shelve the franchise. EA had guided for between 9 million and 10 million units sold for the game, and it's likely that the title will fall well short of that target.

The original Titanfall sold somewhere around 7 million copies on Microsoft's Xbox One, Xbox 360, and PC platforms, and failure to match that figure would represent a notable disappointment for the company, as it had anticipated the series would benefit from its debut on Sony's red-hot PlayStation 4 console. On the other hand, Battlefield 1 looks to be posting strong sales, which could offset some of a Titanfall 2 sales miss.

Taking a wider view, disappointing sales for Titanfall 2 probably do not represent a big threat to EA's long-term success. The company has a wide range of strong properties, and can withstand underperformance from a young franchise like Titanfall. However, it looks like the company's move to challenge Activision Blizzard's position in the first-person-shooter genre, by releasing two high-profile titles in short succession, has backfired.

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Keith Noonan owns shares of Activision Blizzard. The Motley Fool owns shares of and recommends Activision Blizzard. The Motley Fool owns shares of Microsoft. The Motley Fool recommends Electronic Arts. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.