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EA Expands Gaming Portfolio Through Racing Game & Fe Launch

Zacks Equity Research
Updated

Electronic Arts’ EA studio Criterion Games recently announced that Burnout Paradise Remastered will be available from Mar 16 on Sony’s PlayStation 4 and Microsoft’s Xbox One. It further added that the PC-version will be available later this year.

The new edition of the racing game comprises the original base game and the eight add-on game packs. The game will have 4K support for those using PS4 Pro and Xbox One X consoles and promises to be a visual delight for players.

Burnout Paradise Remastered is a notable addition to the sparsely populated game release schedule for the fourth quarter of fiscal 2018. EA and Swedish studio Zoink Games recently announced the availability of Fe for players on Xbox One, PS4, Nintendo Switch, and Origin for PC.

EA also launched UFC 3 on Feb 2 for Xbox One and PS4. Other games in the release slot for the current quarter include A Way Out and The Sims Mobile.
 

Electronic Arts Inc. Price and Consensus

 

Electronic Arts Inc. Price and Consensus | Electronic Arts Inc. Quote

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Digital & Live Services: Key Catalyst

EA has been battered by the underperformance of its much hyped game Star Wars Battlefront 2, which negatively impacted third-quarter fiscal 2018 results. Net bookings declined 4.8% year over year to $1.97 billion, which missed the Zacks Consensus Estimate of $2.02 billion.

However, EA benefited from its popular franchises, especially Battlefield and FIFA. Strength in digital business backed by live services and mobile games was a key catalyst.

Digital net bookings increased 12% year over year to $1.23 billion. Digital net bookings now represent 67% of the business on a trailing 12-months basis as compared with 60% in the year-ago quarter.

Live services net bookings increased 39% year over year to $787 million driven by robust performance from Ultimate Team and The SIMS 4. Moreover, Mobile delivery net bookings increased 5% from the year-ago quarter of $183 million, primarily driven by FIFA mobile.

Innovative Pipeline to Boost Growth

Moreover, EA has a solid portfolio line-up for fiscal 2019. The company is anticipated to launch new versions of popular franchises like FIFA, Madden NFL, NHL, and NBA LIVE.

EA is also anticipated to launch a new Battlefield title. The much hyped game — Anthem — is also expected to release in the fourth quarter of fiscal 2019.

Management also expect eSports will continue to drive growth in Ultimate Team as well as Battlefield and other titles in fiscal 2019.

Zacks Rank & Stocks to Consider

Currently, Electronic Arts (EA) carries a Zacks Rank #3 (Hold).

Paycom Software PAYC, Facebook FB and The Trade Desk TTD are some better-ranked stocks worth considering in the broader technology sector. While Paycom sports a Zacks Rank #1 (Strong Buy), both Facebook and The Trade Desk carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth rate for Paycom, Facebook and The Trade Desk are currently pegged at 25.75%, 26.51% and 25%, respectively.

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