EA Faces Class Action Lawsuit for Sloppy Launch of Battlefield 4

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A class action lawsuit has been launched against Electronic Arts (EA) after its share price dropped, allegedly due to the poor launch of its Battlefield 4 game. The securities lawsuit alleges that EA, including certain officers and directors, violated the Securities Exchange Act of 1934.

The class action lawsuit seeks to recover damages on behalf of those who bought stocks in the company between July 24, 2013 and Dec. 4, 2013. The Battlefield franchise accounted for approximately 11% of the company’s revenues in fiscal year 2012.

The securities lawsuit claims that EA issued “materially false and misleading statements” to highlight the purported strength of the company’s release of Battlefield 4. EA issued a “strong fiscal 2014 financial guidance for the company and actually increased that guidance on Oct. 29, 2013.”

These statements allegedly pushed the stock price to a high of $28.13 per share by Aug. 23, 2013. The class action claims that it allowed certain EA senior executives to sell their stocks at artificially inflated prices.

EA share price took a beating after it was revealed that the company indefinitely halted development in order to focus on fixing bugs of the game. The EA share price declined by more than 7% from a close of $25.96 per share on Nov. 14, 2013 to a closing price of $24.06 per share on Nov. 15, 2013. Declining further on news about bugs, connectivity issues, server limitations and other issues for Battlefield 4, the EA share price ended the day’s trading at $21.01 on Dec. 5, 2013. Overall, it was a 28% decline from the Aug. 23, 2013 share price.

According to the securities lawsuit, statements made by defendants were materially false and misleading because they failed to disclose and misrepresented the following adverse facts which were known to or recklessly disregarded by defendants:

(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 roll-out 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.

The investors in this proposed class action lawsuit are represented by Robbins Geller Rudman & Dowd LLP.

The EA Battlefield 4 Securities Class Action Lawsuit is Ryan Kelly v. Electronic Arts Inc., et al., in the U.S. District Court, Northern District of California.