A sign is posted in front of Electronic Arts (EA) headquarters on March 30, 2023 in Redwood City, California. Video game maker Electronic Arts announced plans to cut 6 percent of its nearly 13,000 person workforce.
Justin Sullivan | Getty Images
Shares of Electronic Arts headed for their steepest drop since 1999 after the video game publisher cut its full-year bookings guidance, due mostly to challenges with its soccer franchise.
The stock plummeted 19% to $115.86 as of mid-day on Thursday. That would be its worst day on the market since the dot-com bubble and the stock’s third-biggest drop since EA’s public market debut in 1990.
For the fiscal third quarter, which ended Dec. 31, EA said late Wednesday that it expects to report about $2.215 billion in net bookings, versus previous guidance of $2.4 billion to $2.55 billion. Revenue in the December quarter was about $1.88 billion, with $1.11 in diluted earnings per share, the company said in a statement.
EA said that “Dragon Age” and its EA Sports FC franchise “underperformed our net bookings expectations.”
“Weakness has been seen largely from the Global Football franchises,” analysts at Roth MKM wrote in a report on Thursday, calling the earnings pre-announcement a “big stumble.” They have the equivalent of a hold rating on the stock.
EA said it expects net bookings for the full fiscal year, ending March 31, of between $7 billion and $7.15 billion, below previous guidance of $7.5 billion to $7.8 billion. EA says net bookings include physical game sales as well as revenue from online games.
The warning points to weakness in the most prominent soccer video game franchise since 1993. It used to fall under the FIFA branding, but in 2022 EA’s deal with FIFA ended and the last two EA soccer games have been sold as EA Sports FC.
The company also said that role-playing game “Dragon Age” had 1.5 million players during the quarter, which was about 50% below its expectations.
EA said it expects Global Football sales to be down on a year-over-year basis, and said that bookings from online sales, or live services, would also decline in fiscal 2025. The company’s soccer franchise, accounted for the majority of the live services shortfall.
EA plans to release full third-quarter results on Feb. 4.
Google on Thursday blamed a “data error” after users reported that former President Joe Biden was missing from the company’s search results.
Users on Wednesday noticed that results for search queries that included “US Presidents,” “United States Presidents” and “US Presidents in order” did not include Biden, who concluded his four-year presidential term on Monday. Users reported seeing a list of presidents ranging from George Washington to President Donald Trump. Some users posted screenshots of their results showing how the lists omitted Biden.
CNBC tried searching for U.S. presidents on Wednesday night and also encountered the results that omitted Biden. The company restored Biden to its results on Thursday.
“There was a brief data error in our knowledge graph,” a company spokesperson said in an emailed statement to CNBC on Thursday. A knowledge graph is a broad term used to describe a system that holds connected information. “We identified the root cause and resolved it quickly.”
Google’s search results for “United States Presidents” omitted President Joe Biden, who ended his four-year term Monday.
The mistake comes after Google CEO Sundar Pichai sent a memo to employees on Election Day in November, asking them to remember that people turn to the company’s services for “high-quality and reliable information.”
“Whomever the voters entrust, let’s remember the role we play at work, through the products we build and as a business: to be a trusted source of information to people of every background and belief,” Pichai wrote. “We will and must maintain that.”
Google’s Biden omission error comes as the company undergoes a turbulent period that has included several product mishaps and global scrutiny.
“It’s not lost on me that we are facing scrutiny across the world,” Pichai said in a December all-hands meeting first reported by CNBC.“It comes with our size and success. It’s part of a broader trend where tech is now impacting society at scale.”
Amid a year of product mistakes, Google launched Imagen 2, which turned user prompts into artificial intelligence-generated images. Immediately after it was introduced, the product came under scrutiny for historical inaccuracies discovered by users. The company pulled the feature for months before relaunching it, and Pichai told employees the company had “offended our users and shown bias.”
Google also faced problems with its AI summaries product AI Overview atop Google’s traditional search results, where users were also quick to find problems upon that launch.
Pichai has been among tech CEOs getting closer to Trump, who has previously alleged that Google intentionally buried search results of him. Those allegations are unproven.
Google donated $1 million to Trump’s inauguration fund, becoming one of several tech companies working to curry favor with the new administration. Pichai had a prominent standing position on stage alongside other tech CEOs at Trump’s inauguration Monday.
The U.S. may have led China in the artificial intelligence race for the past decade, according to Alexandr Wang, CEO of Scale AI, but on Christmas Day, everything changed.
Wang, whose company provides training data to key AI players including OpenAI, Google and Meta, said Thursday at the World Economic Forum in Davos, Switzerland, that DeepSeek, the leading Chinese AI lab, released an “earth-shattering model” on Christmas Day, then followed it up with a powerful reasoning-focused AI model, DeepSeek-R1, which competes with OpenAI’s recently released o1 model.
“What we’ve found is that DeepSeek … is the top performing, or roughly on par with the best American models,” Wang said.
In an interview with CNBC, Wang described the artificial intelligence race between the U.S. and China as an “AI war,” adding that he believes China has significantly more Nvidia H100 GPUs — AI chips that are widely used to build leading powerful AI models — than people may think, especially considering U.S. export controls.
Wang also said he believes the AI sector will reach a trillion dollars, on par with estimates that the generative AI market is poised to top $1 trillion in revenue within a decade.
Read more CNBC reporting on AI
“The United States is going to need a huge amount of computational capacity, a huge amount of infrastructure,” Wang said, later adding, “We need to unleash U.S. energy to enable this AI boom.”
Earlier this week, President Donald Trump announced a joint venture with OpenAI, Oracle and SoftBank to invest billions of dollars in U.S. AI infrastructure. The project, Stargate, was unveiled at the White House by Trump, SoftBank CEO Masayoshi Son, Oracle co-founder Larry Ellison and OpenAI CEO Sam Altman. Key initial technology partners will include Microsoft, Nvidia and Oracle, as well as semiconductor company Arm. They said they would invest $100 billion to start and up to $500 billion over the next four years.
In the interview Thursday, Wang said he believes that it’ll take two to four years to reach artificial general intelligence, or AGI, a widely cited but vaguely defined benchmark used in the AI sector to denote a branch of AI pursuing technology that equals or surpasses human intellect on a wide range of tasks. AGI is a hotly debated topic, with some leaders saying we’re close to attaining it and some saying it’s not possible at all. Wang said his own definition of AGI is “powerful AI systems that are able to use a computer just like you or I could … and basically be a remote worker in the most capable way.”
Anthropic, the Amazon-backed AI startup founded by ex-OpenAI research executives, ramped up its technology development throughout the past year, and in October, the startup said that its AI agents were able to use computers like humans can to complete complex tasks. Anthropic’s Computer Use capability allows its technology to interpret what’s on a computer screen, select buttons, enter text, navigate websites and execute tasks through any software and real-time internet browsing, the startup said.
The tool can “use computers in basically the same way that we do,” Jared Kaplan, Anthropic’s chief science officer, told CNBC in an interview at the time. He said it can do tasks with “tens or even hundreds of steps.”
When asked which U.S. artificial intelligence startups are leading the AI race right now, Wang said that models each have their own strengths — for instance, OpenAI’s models are great at reasoning, while Anthropic’s are great at coding.
“The space is becoming more competitive, not less competitive,” he said.
Correction: This article has been updated to correct the name of DeepSeek’s reasoning-focused AI model, DeepSeek-R1.
LONDON — Britain’s competition regulator on Thursday launched an investigation into Apple and Google’s huge mobile ecosystems to determine whether the tech titans are in breach of the U.K.’s strict new digital competition rules.
The U.K. Competition and Markets Authority said it was opening dual probes into both U.S. tech giants to assess whether they hold “strategic market status” in their respective mobile ecosystems, including operating systems, app stores and smartphone-based browsers.
The investigations will “explore the impact on people who use mobile devices and the thousands of businesses developing innovative services or content such as apps for these devices,” the CMA said.
“Apple believes in thriving and dynamic markets where innovation can flourish,” an Apple spokesperson told CNBC. “We face competition in every segment and jurisdiction where we operate, and our focus is always the trust of our users.”
“In the U.K. alone, the iOS app economy supports hundreds of thousands of jobs and makes it possible for developers big and small to reach users on a trusted platform,” the Apple spokesperson added. “We will continue to engage constructively with the CMA as their work on this matter progresses.”
Google was not immediately available for comment when contacted by CNBC.
New powers
The CMA now has enhanced regulatory powers after a new U.K. law, called the Digital Markets, Competition and Consumers Act, or DMCC, came into effect at the start of this year.
The DMCC seeks to prevent anti-competitive behavior in digital markets. It can designate large companies that have a significant amount of market power in a certain digital activity as having “strategic market status.”
The CMA now has the power to impose changes to prevent potential anti-competitive behavior from any firm that is given strategic market status.
According to the regulator, virtually all mobile devices sold in the U.K. are pre-installed with either Apple’s iOS or Google’s Android operating systems, and their app stores and browsers have either exclusive or leading positions on their platforms compare to alternative products and services.
Almost all (94%) of people aged 16 or above — about 56 million consumers — in the U.K. currently have access to a smartphone and the average Brit spends around three hours a day using a mobile device, the CMA added.
The body said it would examine three key issues, including the extent of competition between Apple and Google’s mobile ecosystems, possible leveraging of the tech giants’ market power into other activities and potential exploitative conduct.
“More competitive mobile ecosystems could foster new innovations and new opportunities across a range of services that millions of people use, be they app stores, browsers or operating systems,” Sarah Cardell, chief executive of the CMA, said in a statement Thursday.
“Better competition could also boost growth here in the UK, with businesses able to offer new and innovative types of products and services on Apple’s and Google’s platforms,” Cardell added.