Electronic Arts Inc. (ERTS) announced new features for their award winning franchise EA SPORTS NHL 12, which will be shipped on September 9 in Europe and on September 12 in North America.
New NHL 12 Features
The new version of the NHL 12 will feature “Be a Pro” mode. This mode will enable the gamers to play and establish a playing career in the history books of NHL by spending more time on the ice. The gamers can thereby play out the entire career in quest for the Stanley Cup.
The Full Contact Physics Engine feature in NHL 12 enhances the game play as players can virtually experience the thrill of real life ice hockey with the skill and aggression of the game. With the addition of new features, everything is interactive and in play. During the game play, players will be able to make contact with the goalies by knocking them down and watch the goalies making some spectacular saves.
Additionally, the fighting engine that was introduced in the NHL10 is being revamped in the NHL12 version. Through this, the goalie makes real life moves like leaving the net, dropping the gloves, and fighting with players on the field.
Our Take
Electronic Arts remains focused on delivering quality titles, which we believe will drive significant top-line growth going forward. The company’s impressive product pipeline guarantees market share gains over the long term.
Moreover, Electronic Arts’ increasing exposure to online social gaming and mobile applications and growing contribution from the Digital business will likely drive revenue over the long term.
Additionally, Electronic Arts is diversifying its portfolio by leveraging its most popular gaming franchises such as Mass Effect, an immensely popular video game franchise to production houses for turning them into theatrical wonders. This suggests that Electronic Arts will not only generate revenues from the sale of video games but will also benefit from movie releases.
However, we believe that cut-throat competition within the video game industry will make it difficult for any single company to gain significant market share in 2011. Electronic Arts continues to face strong competition from Activision Blizzard Inc. (ATVI) and Take-Two Interactive Software Inc. (TTWO) which may act as a headwind going forward.
Moreover, in the social gaming market, Electronic Arts faces increasing competition from social networking companies, such as Zynga.
Zynga has become one of the fastest-growing technology companies by using Facebook Inc.’s social network to distribute games. The company is a dominant player in this sector with more than 210 million monthly active users. Six of the 10 most popular apps on Facebook belong to Zynga, led by “FarmVille” with 57.6 million users. We believe Electronic Arts’ existing tie-up with Facebook will improve its position in the social gaming market going forward.
We remain Neutral on Electronic Arts on a long-term basis (6-12 months).
Currently, Electronic Arts has a Zacks #3 Rank, which implies a Hold rating in the short term.
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