Back to top

Analyst Blog

This page is temporarily not available.  Please check later as it should be available shortly. If you have any questions, please email customer support at support@zacks.com or call 800-767-3771 ext.  9339.

Electronic Arts (EA - Analyst Report) recently announced that it is canceling its 2015 college football game. The game developer cited uncertainty about the future of the franchise due to the ongoing legal dispute between the National Collegiate Athletic Association (NCAA) and student players.

The dispute between NCAA and students started when the latter asked for a share of NCAA revenues for the use of their images and likenesses. Student athletes also sued NCAA’s business partner EA for illegally using their likenesses in its popular NCAA Football video game. Reportedly, EA and student athletes have entered into a settlement agreement, which is subject to court approval.

Traditionally, EA develops a NCAA-branded game each year and recently released NCAA Football 14 in Jul 2013. The practice is more or less similar to the games made under other popular banners such as the National Football League and FIFA.

EA’s move suggests the growing risk faced by game developers in trying to profit from the likeness of the student athletes with that of video game characters. We believe that the cancellation of NCAA Football 2015 will have significant effect on EA’s top-line over the long term.

However, EA has a strong product pipeline that includes the upcoming Battlefield 4. Moreover, the recently released Madden NFL and FIFA 14 are also doing well. We believe that the strong revenue contribution from these games will offset the loss of NCAA in the near term.

We believe that traditional gaming companies, such as EA and Activision (ATVI - Snapshot Report) have substantial growth opportunities due to the upcoming launch of new consoles by Microsoft (MSFT - Analyst Report) and Sony (SNE - Snapshot Report) and strong spending expected in the holiday season.

However, EA continues to hold a competitive edge due to strong digital distribution and leadership position in free-to-play games category.

Currently, EA has a Zacks Rank #3 (Hold).

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

Learn more

Start for as little as $4.50 per trade.

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
LAKE SHORE G LSG 0.77 +6.05%
SKECHERS USA SKX 38.53 +4.50%
QUESTCOR PHA QCOR 80.07 +2.47%
VIPSHOP HOLD VIPS 156.35 +1.82%
ENLINK MIDS ENLC 36.29 +1.60%