Electronic Arts Inc. (EA): A New Hope

A new partnership with Microsoft would help Electronic Arts Inc. (NASDAQ:EA) compete against Activision Blizzard, Inc. (NASDAQ:ATVI), which has worked very closely with Microsoft over the past three years. Back in 2010, the two companies made a strategic partnership to bring its popular Call of Duty games to the Xbox first. Activision also has a strong relationship with Bungie, the maker of Halo, and is working on Destiny, a much-anticipated new game that will release on consoles in late 2013 and is expected to have a 10-year life cycle. A new partnership between Electronic Arts and Microsoft would help the game-maker become a much stronger competitor against the Activision Blizzard, Inc. (NASDAQ:ATVI) powerhouse.

According to BusinessWeek, LucasArts brought in $150 million in revenue in 2012 and had $90 million in operating income. Electronic Arts Inc. (NASDAQ:EA) can’t expect the same revenue as LucasArts for two reasons. The first is that they are two completely different companies with different strategies and workforces, and the second is that LucasArts made money from licensing deals in addition to sales of its games. But Electronic Arts stock investors should look at the Disney deal as a way to bring in new business, for at least several years, with a franchise that’s proven to make money.

The article Electronic Arts Stock Investors Should Be Happy About This originally appeared on Fool.com and is written by Chris Neiger.

Fool contributor Chris Neiger has no position in any stocks mentioned. The Motley Fool recommends Activision Blizzard and Walt Disney and owns shares of Activision Blizzard, Microsoft, and Walt Disney.

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