The Next-Gen Reboot That Could Carry Electronic Arts Inc. (EA) Stock

Electronic Arts Inc. (NASDAQ:EA) was in a sharing mood this week. The company unveiled its entire next-generation game lineup at the E3 industry expo, giving gamers and investors a detailed look at its new slate of titles.

We learned that EA has a few big games in the works, including:

  • From EA Sports: UFC, FIFA 14, Madden NFL 25, and NBA Live.
  • From EA Games: Battlefield 4, Deadspace 3, and Need for Speed Rivals.
  • On Mobile: Plants vs. Zombies 2, Ultima Forever, and Fightback.

Fishing for a hit
While the E3 previews showed off some polished game development, this list is notable for how short it is. That’s deliberate; Electronic Arts Inc. (NASDAQ:EA) has decided to focus efforts on a small crop of games this year. It plans to release just 11 major titles in 2013, as compared with the 36 it put out in 2011.

Electronic Arts Inc. (NASDAQ:EA)

That will allow EA to focus its development and marketing resources, but it also raises the stakes for each of these games, since a flop in any one could swamp the company’s results. FIFA 13, for example, was responsible for a whopping 17% of the company’s revenue last year.

The video game business has gotten more “hit” driven as sales have shrunk. Activision Blizzard, Inc. (NASDAQ:ATVI)‘s top four games, for example, accounted for 83% of its revenue last year — and almost every penny of its operating income. Activision says that despite the 21% decline in sales for the industry as a whole in 2012, the top five titles actually eked out a 1% gain.

Time for battle
Electronic Arts Inc. (NASDAQ:EA)’s challenge this year will be to break into that top tier. Its best chance there is probably Battlefield 4, which is set to challenge Activision’s Call of Duty franchise in a head-to-head matchup this fall. Activision is taking that franchise in an entirely new direction with Ghosts, so the door might be open for Electronic Arts Inc. (NASDAQ:EA) to win over gamers. And that might finally help the company turn the sales tide that it’s been losing badly to Activision lately.

ATVI Revenue TTM data by YCharts.

Regardless of which company wins this round, though, both will have to ramp up marketing spending in support of their relatively few launches. They don’t have a choice, even If it means lower profits this year. No game publisher can afford to be left behind as the industry moves to the next-generation consoles.

The article The Next-Gen Reboot That Could Carry Electronic Arts Stock originally appeared on Fool.com.

Fool contributor Demitrios Kalogeropoulos owns shares of Activision Blizzard, Inc. (NASDAQ:ATVI). The Motley Fool recommends and owns shares of Activision Blizzard.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

Qihoo 360 Technology Co Ltd (QIHU), Actavis plc (ACT), Yahoo! Inc. (YHOO) Among 20 Long Ideas from Sohn Canada

The 10 Laziest Countries in the World

The 10 Most Polluted Countries in the World

The 10 Most Dangerous Cities in America 2014

The Top 10 Gold Producing Countries in the World

The 10 Tallest Buildings in the World

The 10 Richest Stand Up Comedians in the World

The 10 Fattest Countries in the World

The 5 Best Summer Jobs for Teens

The 10 Most Religious Countries in the World Keeping the Faith

The 10 Most Educated Countries in the World

The 10 Most Popular Cell Phones in the World

The 10 Drunkest Countries in the World

The 10 Most Expensive Private Schools in the World

The 10 Smallest Countries in the World

Walking Dead Season 5 Spoilers You’ll Wish You Didn’t Know

The 10 Poorest Countries in the World

The 10 Greenest Countries in the World

The Top 10 Countries with the Highest Population in the World

The 10 Most Visited Countries in the World

The Top 10 Star Wars Characters in the Iconic Series

The 10 Most Expensive Android Phones in the World

5 Reasons Why The Illuminati Is Real and a Threat to Society

The 6 Scariest Halloween Costumes Ever Screamed At

The 4 Biggest Hedge Fund Managers in the World Today

The 15 Most Densely Populated Countries in the World

The 10 Biggest Tea Drinking Countries in the World

Top 6 Ways to Improve Your Checkout Process and Close Sales

The 5 Most Profitable Online Businesses You Can Start Today

The 20 Most Profitable Hospitals in the US

The 5 Most Profitable Home Businesses to Start

The 7 Teams that Will Win the Stanley Cup in 2015

The Top 10 Most Expensive Digital Cameras to Snap Stunning Shots With

The 10 Highest Quality Fast Food Restaurants In America Today

The 8 Best Halloween Decorating Ideas to Spook Up Your House

10 Marvel Women that Should Get a Movie Right Now

The 20 Best Remixes of Popular Songs that Will Make You Forget the Originals

7 Most Expensive Cities in the World

5 Least Expensive Cities in the World

10 Celebrities Who Believe In Scientology

10 High Margin Food Products to Build a Business Around

The 10 Most Expensive Clothing Stores in the United States to Get Decked Out At

The 5 Biggest Kickstarter Scams That Swindled Backers’ Donations

The 10 Most Expensive Boarding Schools In the World

50 Crazy Facts About Japan You Won’t Believe

Top 10 Least Expensive Hybrid Cars to Save the Planet With

The 10 Biggest ‘Gate’ Controversies in History

The 10 States with the Highest Nursing Shortages Leaving Their Hospitals Depleted

The 10 Best Value Investment Blogs that Every Investor Must Read

The 6 Cheapest Boarding Schools in Europe 2015

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!