EA Strives to Boost Star Wars Sales
Electronic Arts Inc. (EA) has started taking pre-orders for the first expansion pack of Star Wars: The Old Republic. The expansion pack is called Rise of the Hutt Cartel and is set to release in Spring 2013.
Set in the planet of Makeb, Rise of the Hutt Cartel takes gamers on a story-driven mission where they battle against ‘Hutt Cartel’, in the process passing through five new levels. Star Wars subscribers will have to pay $9.99, a discount of 50% to the original price. Free-to-Play Players of the game can get the pack for $19.99.
This will be EA’s second initiative to boost the game’s popularity after it launched the Star Wars’ free-to-play version recently. This game is one of the costliest from EA’s stable in terms of game development and promotional expenses. However, it has failed to live up to EA’s expectations with its subscriber base steadily declining since its release in the third quarter of fiscal 2012. EA said that the decline in subscriptions was primarily due to the exit of gamers playing on a casual or trial basis.
Now, by providing a new expansion pack and new levels, EA is making an initiative to capture gamers’ imagination and keep their interest in the franchise alive. So far, EA has always benefited from the launch of DLCs and expansion packs for its famous franchises such as Battlefield and Mass Effect. Archrival Activision (ATVI) has seen success with DLCs for its well-acclaimed Call of Duty franchise.
We believe that EA’s high-quality titles, a robust product pipeline, 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 about EA due to the 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 (Hold).
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