Though Electronic Arts Inc. (NASDAQ:EA)‘s stock investors will note that the company’s share price is up 25% since the beginning of 2013, things haven’t been going well for EA recently. But despite a few setbacks, the company scored a major victory earlier this week.
A new hope
Back in March, EA CEO John Riccitiello resigned from the company after taking responsibility for its financial problems. A few weeks after that, the company announced major layoffs, and then days later it said it was shutting down its Facebook games. To top it all off, Electronic Arts Inc. (NASDAQ:EA) had a disastrous launch of the popular SimCity game around the same time.
But this seasoned game maker finally has something to be happy about — Star Wars. The Walt Disney Company (NYSE:DIS), the now-owner of all things involving the force, shut down LucasArts and struck a deal with EA to create future Star Wars games. Electronic Arts will create games for core gaming audience, meaning game consoles and PCs, and Disney will retain the rights to online, mobile, tablet, and social games.
Electronic Arts Inc. (NASDAQ:EA)’s top three studios — DICE, Visceral, and BioWare — will work on the games, BioWare having worked on several Star Wars games in the past with LucasArts. Striking a deal like this with The Walt Disney Company (NYSE:DIS) is great news for EA and its stock investors. Not only does the deal come at a time when the company needs some good news, but if EA also delivers great Star Wars games for Disney, it could lead to much more collaboration between the two companies in the future.
Just as Electronic Arts Inc. (NASDAQ:EA)’s BioWare had the licensing agreement for two previous Star Wars games, other companies such as Obsidian and Traveller’s Tales have created games based on Star Wars characters. What’s great for Electronic Arts stock investors is that the deal is a multi-year exclusive licensing agreement for the company. Although it’s unclear what the fate of current Star Wars games will be that aren’t made by the company, it seems that all future Star Wars-related games on PCs and consoles will comes through Electronic Arts — globally.
More good news ahead?
In addition to the Disney deal, rumors have been swirling that Electronic Arts Inc. (NASDAQ:EA) will announce a new partnership with Microsoft Corporation (NASDAQ:MSFT) next month, at the company’s forthcoming Xbox unveiling. Although nothing has been formally announced between the companies yet, if the speculations are true then it will be a turning point for EA, which up until now has been more focused on creating games for Sony Corporation (ADR) (NYSE:SNE)‘s PlayStation consoles. Both Microsoft and Sony are in a heated console battle, with the latest numbers from IDC showing that Microsoft Corporation (NASDAQ:MSFT) has shipped 76 million Xbox 360 units since its launch, and Sony Corporation (ADR) (NYSE:SNE) has shipped 77 million PlayStation 3’s since its launch — even though the PS3 launched a year after the Xbox 360.