Electronic Arts Inc.ERTS

Stock Research and Analysis

by Sunit Gogia

Electronic Arts is struggling to maintain market share in the wake of several issues, including a misplaced bet on the success of Sony's SNE PlayStation 3 console, decline in game quality, and stronger competition in the video game industry. Although Read more

Bulls Say

EA's portfolio of games is stronger than ever with the addition of games targeted at casual gamers.

EA will extend its leadership into new segments such as online and mobile gaming, boosting revenue and margins.

EA's subscription-based business model in Asia has been very successful. Asia will be a huge driver of profitable growth as the company rolls out new games in new territories. Read more

Bears Say

EA was late to the Nintendo Wii party and will find it hard to play catch-up, since new franchises are easier to establish early in a console cycle.

The casual gamer demographic has been a major contributor to recent growth of the video game market. EA's competitors, including Activision and THQ, are better positioned to capture this segment.

The company may have invested too early in emerging opportunities such as online and mobile gaming. These markets might not turn out to be as lucrative as EA hopes.

EA competes with larger first-party video game publishers such as Nintendo, Sony, and Microsoft MSFT, which have greater resources and an institutional advantage in developing games for their own gaming consoles. Read more

Strategy

EA seeks to increase revenue by gaining share in its core markets and establishing a leadership position in emerging segments such as online gaming, mobile gaming, in-game advertising, and the sale of Read more

Management

Chairman Lawrence Probst and CEO John Riccitiello have long histories of leading the company. Executive compensation includes base salary and incentives in the form of a performance bonus and equity stake. The equity compensation for most executives Read more

Profile

Electronic Arts is the leading publisher and developer of video games for consoles, PCs, and handheld devices. The company is the largest seller of sports-based video games, Read more

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