Video game developer and publisher, Electronic Arts Inc. (EA) recently announced a number of new games from some of its acclaimed studios that will be showcased at the ongoing Electronic Entertainment Expo (E3).
EA studio Visceral Games announced a sequel to the critically acclaimed Dead Space franchise called Dead Space 3 (February 2013). The new game is set on a new planet known as Tau Volantis, where the main protagonist crash-lands. Dead Space 3 carries a new co-operative feature, which allows players to team up with friends to embark on the fascinating journey.
Criterion Games announced the new game Need for Speed Most Wanted (October 2012), a much anticipated sequel of the Need for Speed franchise. The new game carries an additional feature known as Autolog. With the help of Autolog technology, gamers can challenge friends across social networks for single play or multi-play racing.
Digital Expansions and Bonus Packs
The new game of theMedal of Honor franchise, Medal of Honor Warfigher (October 2012) has an additional mode which allows gamers to combat against other well known warriors all over the world. EA recently launched a limited edition of the sequel along with a number of bonus packs. Gamers pre-ordering Medal of Honor Warfigher Limited Edition, will be the first to unlock these special packs.
Another well known studio DICE recently announced a new “premium” membership for Battlefield 3 fans. Gamers upgrading themselves to the premium membership for $49.99 get five new digital expansion packs, namely Battlefield 3: Back to Karkand (available now), Battlefield 3: Close Quarters (available now), Battlefield 3: Armored Kill (September 2012), Battlefield 3: End Game (December 2012) and Battlefield 3: Aftermath (March 2013).
EA also announced a new reward point system for EA SPORTS Football Club members. As per the new system, the returning members will be able to carry forward their level and experience points (:XP) from FIFA 12 to FIFA 13. FIFA 13 players will also earn Football Club Credits to unlock different items. The players will be able to interact with their friends through EA SPORTS Football Club. EA also announced that the mobile versions (both for iOS and android enabled devices) of FIFA 13 will be connected with the Football Club.
Expanding into Facebook
After introducing The Sims Social last year, EA is bringing its simulator gaming franchise SimCity to Facebook, the world’s largest social network. Developed by EA studio Maxis, the game is known as SimCity Social. Being a social game, players are allowed to visit their friends’ cities, can also use their resources to complete tasks and can choose to build friendly relationships among themselves.
Grabs UFC Rights
EA announced that it is buying out the licensing rights of Ultimate Fighting Championship (:UFC) from Zuffa LLC. THQ Inc. (THQI) used to hold the rights associated with the brand name. The new multi-year, multi-product partnership will provide EA the exclusive rights to develop UFC videogames along the lines of FIFA and NHL. We believe that the popularity of the UFC videogames among hardcore gamers will drive EA’s customer base and top-line growth going forward.
At Last, Free!
As anticipated, EA is opening up its portfolio for free gamers. According to a recent news feed from Reuters, EA is planning to offer at least 15 levels (from July) of its magnum opus, Star Wars: Old Republic for free to play. The company expects that this free offering will boost its dwindling subscriber base going forward. EA lost approximately 400K subscribers in the fiscal fourth quarter. EA expects to earn significant revenue from additional features and through micro-transactions by selling in-game based items.
We believe that EA is diversifying its revenue earning base. With rising consumer spending on digital gaming (social, mobile, casual), we remain optimistic on EA’s growth trends over the long term. The company is opening up new fronts in social, mobile and online gaming based on its well known franchises which is expected to boost its customer base going forward.
We believe that EA’s innovative product pipeline will boost its market share in the online gaming market. Moreover, EA’s strong focus on the digital segment will help it stand out even amid sluggish market conditions going forward. However, the highly fragmented video game market continues to witness increased competitive pressures, which are hurting its overall profitability. This compels us to remain Neutral on the stock over the long term.
Currently, EA has a Zacks #3 Rank, which implies a Hold rating in the near term.Read the Full Research Report on THQI
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