Whether or not you are interested in gaming, the name Electronic Arts (EA) will definitely ring a bell. The company has been responsible for creating, marketing, and publishing some of the most popular videogame franchises of all time. Madden, FIFA, Battlefield, Dragon Age, the list of successful titles under the EA banner is quite exhaustive and impressive.
This success has not come without some ire, however. The company has fallen under criticism many times over the past few years for numerous business and creative practices. From buying out smaller companies to claim intellectual rights to forcing 100-hr work weeks on their employees during “crunch time”, EA has been under fire year after year. In 2012 The Consumerist awarded EA with the title of “Worst Company in America” and did so again the following year, making EA the only company in the history of the award to win twice. .
It seems as though EA will be facing another round of public criticism going into 2014. A few weeks ago, the law firm of Holzer & Fistel announced that they were currently investigating EA in relation to claims that the company made concerning Battlefield 4 earlier this year. The class action lawsuit is being filed against EA following the embarrassing launch of Battlefield 4 and the damage that the launch had on EA share prices.
"Based on the purported strength of the Battlefield 4 rollout then underway, defendants issued strong fiscal 2014 financial guidance for the Company and actually increased that guidance on October 29, 2013. The price of Electronic Arts' stock steadily climbed on these statements, reaching a Class Period high of $28.13 per share by August 23, 2013 and allowing certain of Electronic Arts' senior executives to sell their Electronic Arts stock at artificially inflated prices."
Battlefield 4 suffered from one of the worst launches in recent history, which drove the prices of the company’s stock through the floor. EA also announced that developer DICE has halted all future projects in an effort to repair the broken game. The claim also cites statements made on a support site for Electronic Arts:
"...On November 15, 2013, the day Sony released its new Play Station 4 ('PS4') console, it was disclosed that players of Electronic Arts’ games were being subjected to multiple glitches and significant crashes when attempting to play Electronic Arts' titles on PS4,"
If that wasn’t enough for EA to deal with, another law firm has announced that they too are filing legal action and investigating EA for the same claims made earlier this year. Robbins Geller Rudman & Dowd LLP alleges that EA violated the Securities Exchange Act by, “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.”
It seems as though the odds are beginning to stack up against the videogame powerhouse. Whether or not this will pan out to nothing more as allegations, or a large undisclosed settlement will be made is still up in the air. As this develops, the maneuvers of EA will be quite interesting to watch.