EA Launches New Expansion Pack

Zacks

Electronic Arts (EA) studio DICE recently announced the launch of Battlefield 3: Aftermath digital expansion pack. The expansion pack is currently available to Battlefield 3 Premium members, exclusively on Sony’s (SNE) PlayStation 3. For Battlefield 3 Premium members using Microsoft’s (MSFT) Xbox 360 and personal computers, the expansion pack will be available from December 4, 2012 onward.

Battlefield 3 has been touted as one of the most successful EA games of all time. It earned the distinction of being the fastest selling title in EA’s history, selling more than 17 million units since its release. Battlefield 3 Premium edition was launched by EA in September, 2012 and currently has 2 million members.

The membership of Battlefield 3 Premium service allows players complete first hand access to all expansion packs namely Back to Karkand, Close Quarters and Armored Kill, just released Aftermath and the upcoming End Game (March 2013).

Battlefield 3: Aftermath is the fourth expansion pack of the series, which offers four new maps in a vertical and horizontal setting, three new vehicles, a civilian vehicle and a complete new game mode (Scavenger). Battlefield 3 players who do not have a premium membership will be able to access the expansion pack from December 11 and 18, on PlayStation and Xbox 360 & personal computers, respectively.

Lately, downloadable contents (DLCs) and expansion packs have been extensively used by publishers such as EA and Activision Blizzard (ATVI) to keep gamers interested in the franchise. So far, EA has always benefited from the launch of DLCs and expansion packs for some of its famous franchises that include Battlefield and Mass Effect. Activision has also released a number of expansion packs for its well acclaimed Call of Duty franchise.

However, some gamers remain dissatisfied with the continuous launch of DLCs as they believe that DLCs and expansion packs are being used by gaming companies to exploit them. They blame video game companies of intentionally holding back game content, which they later on release in the form of DLCs and expansion packs to garner recurring revenues.

Although this negative publicity may hurt subscriber base, we nonetheless believe that EA and Activision will continue to launch expansion packs of their popular franchises going forward.

We believe that EA’s high-quality titles and a robust product pipeline along with the increasing online exposure and traction in the social and mobile gaming market will not only offset any near-term dissatisfaction among its subscribers, but will also boost top-line growth over the long term.

However, we remain cautious on EA due to sluggish consumer spending, dismal video game sales and increasing competition. Considering these factors, we have a Neutral recommendation on EA over the long term. Currently, EA has a Zacks #3 Rank, which implies a ‘Hold’ rating in the short term.

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