Video game developer and publisher, Electronic Arts Inc. (ERTS), popularly known as EA, unveiled Warhammer Online: Wrath of Heroes, a new player-versus-player (PvP) free game based on Bioware (an EA division) operated Warhammer Online: Age of Reckoning.
Warhammer Online: Wrath of Heroes offers players a variety of heroes to choose from, each customized for different PvP playstyles. Warhammer Online: Wrath of Heroes will be available for free download on personal computers (PC) in North America and Europe by the fall of 2011.
EA also unveiled a number of new games that will be available in the first half of calendar year 2012.
Independent game developer Funcom and EA Partners (an EA division) announced that the highly anticipated Massively Multiplayer Online Game (MMO), The Secret World will release for PCs in April 2012. Players can register themselves to play the beta version starting August 26, 2011.
EA SPORTS is currently developing an authentic street soccer game, which replicates the way the game is played by street players all over the world. The game known as EA SPORTS FIFA Street will be available on Sony Corp.’s (SNE) PlayStation 3 computer entertainment system and Microsoft Corp.’s (MSFT) Xbox 360 videogame and entertainment system by early 2012.
Like FIFA Soccer 12, which will hit stores on September 27, 2011, EA SPORTS FIFA Street will also run on EA’s new Player Impact Engine. FIFA Street will also be attached with the EA SPORTS Football Club, a live service available at no additional charges that connects players to the real-world game with fresh, regularly updated content, enabling them to cheer for their favorite club and connect and compete with their friends and millions of players across the globe.
EA and 38 Studios, LLC announced that the action-packed role-playing game (RPG), Kingdoms of Amalur: Reckoning will be launched in Europe on February 10, 2012 and in North America on February 7, 2012. Reckoning is a single-player game where players embark on a journey to unlock the mysteries of Amalur while redefining their hero’s destiny and the fate of the world.
Our Take
We believe EA boasts a strong product pipeline for fiscal 2012 and beyond, which will drive top-line growth going forward. We believe that high quality titles, impressive product line, increasing exposure to online and social games and diversification of the portfolio guarantees market share gains over the long term.
However, a gloomy macro environment in North America and a debt-ridden European market will remain headwinds for the stock. This, along with competition from Activision Blizzard Inc. (ATVI) and Take-Two Interactive Software Inc. (TTWO) will likely hurt profitability going forward.
We have a Neutral recommendation on Electronic Arts over the long term (for the next 3 to 6 months). Currently, Electronic Arts has a Zacks #2 Rank, which implies a Buy rating in the short term.
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