EA Unveils Final Mass Effect 3 DLCs

Electronic Arts (EA - Analyst Report) recently unveiled two new downloadable content packs (DLCs) for Mass Effect 3, namely Reckoning, which is multiplayer and Citadel, a single player pack. Developed by gaming studio Bioware, these are the final DLCs of the Mass Effect trilogy.

The multiplayer Mass Effect 3: Reckoning is set to release on Feb 26 and will be available on Microsoft’s (MSFT - Analyst Report) Xbox 360 and PC. For Sony’s (SNE - Snapshot Report) PlayStation 3 network, the game will release on Feb 27. Reckoning gives players free access to new characters, weapons and upgrades that they can use to fight off alien reapers.

The single-player Mass Effect 3: Citadel is set to release on Mar 5 and will be available on Xbox 360 and PC. For PlayStation 3 network, the game will release on Mar 6. Being the concluding chapter, Citadel brings together the characters of the original Mass Effect and Mass Effect 2 for the first time in the history of the franchise.

Players set out on a mission to uncover a conspiracy that targets the protagonist Commander Shepard. For the first time the pack gives players access to Citadel’s Silver Coast Casino and Armax Combat Arena. They can also explore and furnish Shepard’s living quarters on the Citadel, which is an added attraction. The DLC costs $14.99 or 1200 Microsoft points.

The Mass Effect trilogy continues to be one of the most successful franchises for the company since the last couple of years. However, Mass Effect 3 (released Mar 6 2012) faced severe criticism because of its inconclusive ending. Many gamers blamed EA of intentionally holding back game content, which they later on release as DLCs to garner additional revenues.

EA released a number of DLCs both for the single-player and multi-player format over the last 12 months. These DLCs expanded the story of the original game and added a new dimension to the ending. We believe that the concluding packs will help EA to woo back some of its dissatisfied customers going forward.

So far, EA has always benefited from the launch of DLCs for some of its famous franchises. In the recently concluded third quarter for instance, extra content and free-to-play were responsible for much of EA’s digital revenue growth. EA’s DLC and free-to-play micro transaction content shot up 50.0% year over year to $185.0 million in the quarter.

We believe that given EA’s variety of titles and massive fan following, it is better equipped to gain traction in the digital format than most of the other new players. This will also help it to counter stiff competition from Activision (ATVI - Snapshot Report) going forward.

However, we believe that EA faces a number of headwinds that include a soft video game industry performance, particularly due to weakness in retail sales amid an aging console system lifecycle. Additionally, the huge popularity of free-to-play games is also cannibalizing higher priced packaged goods video games sales, which is a major concern in our view.

Currently, EA has a Zacks Rank #4 (Sell).