EA Launches FIFA Street - Analyst Blog
March 14 2012 - 5:00AM
Zacks
Electronic Arts Inc. (EA) recently released
FIFA Street, the latest game from the FIFA
Soccer franchise. The game captures the essence of “the
beautiful game”, ala street style. The game can be played on
Sony Corp.’s (SNE) PlayStation3 and
Microsoft Corp.’s (MSFT) XBox 360.
FIFA Street, as the name implies, gives the
gamers a chance to test their street football skills in 35
locations around the world with different modes (Panna Rules, Last
Man Standing and World Tour story mode). The game won 9 points out
of 10 by Official Xbox Magazine, which commended it by
saying that FIFA Street is “setting the standard for all
other sports games”. Meanwhile, PlayStation: The Official
Magazine described the game as “chaotic, tense, and above all,
super fun”.
EA SPORTS’ FIFA franchise has attained an almost cult status
among soccer fans. Thus, the release of the latest version is not
only going to amplify the present craze but also rake in the
revenues for the company. Interestingly, more than 2.1 million
gamers have downloaded the demo version of the game, making it the
second-most downloaded demo. It is FIFA Soccer 12, also
from EA SPORTS’ stable that currently holds the top rank in that
list, according to Sony and Microsoft.
EA’s last reported quarter was an impressive one, primarily
driven by robust digital revenues and strong performances from
Battlefield 3, Star Wars: The Old Republic (both
launched during the holiday season) and FIFA 12.
EA’s pipeline consists of high-quality titles and with the
increasing online exposure, social games guarantee market share
gains over the long term. However, the gloomy macro-economic
environment, increasing competition and weak video game sales
results over the last 12 months, compel us to remain cautious in
the near term. Competition from Activision Blizzard
Inc. (ATVI), Zynga Inc. (ZNGA) and
International Game Technology (IGT) may act as
headwind going forward.
Moreover, the whole video game industry has been plagued by weak
consumer spending and troubled economic conditions. According to
market research firm, The NPD Group, US sales for February 2012 was
down 20.0% from the comparable year-ago period to $1.06 billion. In
February, Electronic Arts’ much-awaited Kingdoms of Amalur:
Reckoning took the fourth position among the top ten games.
However, EA’s Battlefield 3 seemed to have lost its sheen and
plummeted to the 10th spot from the fifth position that it held in
the preceding two months.
Despite the dismal figures in February, analysts tracking the
video game industry believe that few big game launches from
bellwether publishers could boost revenues in March. Some of the
games that are to be launched in March are Nintendo’s Mario Party
9, Konami Corp.’s (KNM) Silent Hill
Downpour and Capcom’s Resident Evil: Operation Raccoon
City. Incidentally, EA’s much-coveted Mass Effect 3
has already been released and the company said that it has shipped
3.5 million units of the game in the first week of its release.
Additionally, we believe that companies with significant
exposure to the digital business will stand out even in this
sluggish market. Moreover, new game releases and improvement in
consumer spending will act in favor of the industry.
We have a Neutral recommendation on Electronic Arts over the
long term (for the next 3-6 months). Currently, Electronic Arts has
a Zacks #3 Rank, which implies a Hold rating in the short term.
ACTIVISION BLZD (ATVI): Free Stock Analysis Report
ELECTR ARTS INC (EA): Free Stock Analysis Report
INTL GAME TECH (IGT): Free Stock Analysis Report
MICROSOFT CORP (MSFT): Free Stock Analysis Report
SONY CORP ADR (SNE): Free Stock Analysis Report
ZYNGA INC (ZNGA): Free Stock Analysis Report
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