China Ban on EA's Battlefield 4

Zacks

Electronic Arts’ (EA) new war simulation game, Battlefield 4 has been banned in China. However, the ban is not expected to hurt the company much, since it does not offer the product in the country.

Battlefield 4 was banned following the release of a new downloadable storyline titled “China Rising”. The storyline revolves around a Chinese military leader who is set to attack American forces as part of an attempted coup.

Though the copy of the official document was not made available immediately, some local blogs suggest that the game was banned citing “national security reasons” and “perceived aggression” against the Chinese culture.

This is not the first time that the Chinese communist regime has imposed a ban. Videogame consoles have already been banned in the country for a decade or so, citing detrimental effects on children. Although the government has started to loosen its grip on the market, players have had to buy the devices from importers and private retail outlets in the past. Battlefield 4 is available on consoles from Microsoft (MSFT) and Sony (SNE) across different geographic regions.

EA’s Battlefield is one of its most successful franchises and has more than 65 million players worldwide. The last installment of the series was Battlefield 3: End Game, an expansion pack of the original Battlefield 3, which had been rated very highly by Metacritic. Moreover, almost all the recently released games and expansion packs of the Battlefield series have generated decent sales.

We believe that Battlefield 4 will likely set the bar a notch higher with its latest technology, Frostbite 3 engine, and innovative game play. Moreover, EA’s massive fan following and a possible holiday season release of the game are likely to act as positives for the company.

However, we are also cautious on EA due to sluggish consumer spending on packaged video games, dismal video game sales and increasing competition from Activision (ATVI).

EA currently has a Zacks Rank #3 (Hold).

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