Video game developer and publisher, Electronic Arts Inc. (EA) recently announced a number of new games from some of its acclaimed studios. The games were showcased at the ongoing Electronic Entertainment Expo (E3).
EA unveiled a number of new gaming titles that include sequels of popular franchises such as Battlefield 4 Multiplayer, FIFA 14, Madden NFL 25, NBA LIVE, Plant Vs Zombies Garden Warfare, Dragon Age Inquisition, Need For Speed Rivals and Command & Conquer. EA unveiled the inaugural version of Titanfall and also announced the revival of Mirror’s Edge.
Developed by Respawn Entertainment; Titanfall will be available on Microsoft’s (MSFT) upcoming Xbox One and Xbox 360 as well as on PCs. The game is scheduled to release in spring 2014.
Developed by DICE, EA is bringing back yesteryear favorite Mirror’s Edge (first released in 2008) for Microsoft’s Xbox One as well as for Sony’s (SNE) PlayStation 4. The game is currently in early stages of development and will be supported by EA’s frostbite technology.
Beside these popular franchises, EA revealed its new IGNITE technology that will power EA SPORTS UFC, which is set to release in spring 2014 for Xbox One and PlayStation 4. In 2012, EA bought the licensing rights of Ultimate Fighting Championship (:UFC) from Zuffa LLC.
Based on its recent licensing agreement with Walt Disney (DIS), EA also announced a new game called STAR WARS: BATTLEFRONT at the E3 show.
EA’s gaming pipeline clearly reflects the company’s focus on the Xbox One and PlayStation 4. EA did not announce a single game for Nintendo’s platform, citing lower demand for the console compared with Microsoft’s and Sony’s. We believe that strong pent up demand for the upcoming consoles will further boost EA’s sales volume going forward.
Additionally, EA’s high-quality titles and an innovative product pipeline will boost its top line growth in 2014. We believe that EA’s strong digital portfolio and continuing growth in the free-to-play and online segment will drive top-line growth in the near term.
Moreover, the company’s efforts to optimize costs through overhead reductions will be beneficial going forward.
However, we believe that EA faces a number of headwinds that include a soft video game industry performance, particularly due to weakness in retail sales amid an aging console system lifecycle. Competition from other game makers is also a headwind going forward.
Currently, EA has a Zacks Rank #2 (Buy).
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