EA Being Hit With A Class Action Lawsuit Over Battlefield 4
As we recounted yesterday in this article. DICE and EA have been under heavy scrutiny since the launch of Battlefield 4. Many gamers have experienced more than a fair share of issues with the game. The title has suffered so heavily that DICE has been pulled from all other development until it’s up to par.
We’d heard that a law firm was investigating EA and the Battlefield 4 situation on behalf of one of EA’s investors. Now it appears that a class action suit has been levied against the publisher. The basis of the lawsuit is as follows:
The complaint alleges that during the Class Period, defendants issued 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,
In addition to the alleged overall misrepresentation, an additional segment of the complaint,
further alleges that, 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.
EA was unable to stave off the class-action suit that crippled its annual NCAA franchise. Do you think this lawsuit is justified? It remains to be seen what will come of the legal proceedings, but its clear that another one of EA’s flagship franchises has been damaged by these allegations. The full press release containing the details of the class action suit can be found below.
NEW YORK–(BUSINESS WIRE)–Robbins Geller Rudman & Dowd LLP (“Robbins Geller”) (http://www.rgrdlaw.com/cases/electronicartsinc/) today announced that a class action has been commenced in the United States District Court for the Northern District of California on behalf of purchasers of Electronic Arts, Inc. (“Electronic Arts,” “EA” or the “Company”) (NASDAQ:EA) common stock during the period between July 24, 2013 and December 4, 2013 (the “Class Period”).
If you wish to serve as lead plaintiff, you must move the Court no later than 60 days from today. If you wish to discuss this action or have any questions concerning this notice or your rights or interests, please contact plaintiff’s counsel, Samuel H. Rudman or David A. Rosenfeld of Robbins Geller at 800/449-4900 or 619/231-1058, or via e-mail at firstname.lastname@example.org. If you are a member of this class, you can view a copy of the complaint as filed or join this class action online at http://www.rgrdlaw.com/cases/electronicartsinc/. Any member of the putative class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member.
The complaint charges Electronic Arts and certain of its officers and directors with violations of the Securities Exchange Act of 1934. Electronic Arts develops, markets, publishes and distributes video game software content and services that can be played by consumers on a variety of Internet-based electronic devices for video game consoles, personal computers, mobile phones, tablets and electronic readers.
The complaint alleges that during the Class Period, defendants issued 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, which had provided approximately 11% of its revenues in fiscal 2012. 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.
The complaint further alleges that, 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. The price of Electronic Arts stock fell on these disclosures, declining more than 7% from a close of $25.96 per share on November 14, 2013 to close at $24.06 per share on November 15, 2013. Then, on December 4, 2013, it was disclosed through discussions defendants had with video game bloggers that due to bugs, connectivity issues, server limitations, and various other problems plaguing Battlefield 4, Electronic Arts had been forced to indefinitely halt the Battlefield 4 rollout and other projects until the problems with Battlefield 4 could be fixed. The price of Electronic Arts shares declined on this news from a close of $22.34 on December 4, 2013 to close at $21.01 on December 5, 2013, sending the share price down more than 28% from its Class Period high.
According to the complaint, defendants’ Class Period statements 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 rollout 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.
Plaintiff seeks to recover damages on behalf of all purchasers of Electronic Arts common stock during the Class Period (the “Class”). The plaintiff is represented by Robbins Geller, which has expertise in prosecuting investor class actions and extensive experience in actions involving financial fraud.
Robbins Geller represents U.S. and international institutional investors in contingency-based securities and corporate litigation. With nearly 200 lawyers in ten offices, the firm represents hundreds of public and multi-employer pension funds with combined assets under management in excess of $2 trillion. The firm has obtained many of the largest recoveries and has been ranked number one in the number of shareholder class action recoveries in MSCI’s Top SCAS 50 every year since 2003. Please visit http://www.rgrdlaw.com for more information.
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