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Electronic Arts (EA - Analyst Report) studio DICE recently announced the launch of Battlefield 3: End Game digital expansion pack. The expansion pack is currently available to Battlefield 3 Premium members, exclusively on Sony’s (SNE - Snapshot Report) PlayStation 3.
Battlefield 3 has been touted as one of the most successful EA games of all times and earned the distinction of being the fastest selling title in EA’s history. Battlefield 3 Premium was launched by EA in Sep, 2012 and currently has more than 2.9 million members.
The membership of Battlefield 3 Premium service allows players complete first hand access to all expansion packs namely Back to Karkand, Close Quarters, Armored Kill, Aftermath and the just released End Game.
Battlefield 3 players who do not have a premium membership will be able to access the expansion pack from Mar 19 and 26, on PlayStation and Xbox 360 & personal computers, respectively.
Battlefield 3: End Game is the fifth and final expansion pack of the series, which offers four new maps, a new bike and two new vehicles and a new drop ship. The expansion pack also brings back two classic game modes (Capture the Flag and Air Superiority), which is an added attraction.
Lately, downloadable contents (DLCs) and expansion packs have been extensively used by EA to keep gamers interested in its game franchises. So far, EA has always benefited from the launch of DLCs and expansion packs for some of its famous franchises that include Battlefield and Mass Effect.
However, some gamers remain dissatisfied with the continuous launch of DLCs as they believe that DLCs and expansion packs are being used by gaming companies to exploit them. They blamed EA of intentionally holding back game content, which it releases later in the form of DLCs and expansion packs to garner recurring revenues.
Although this negative publicity may hurt subscriber base, we nonetheless believe that EA will continue to launch expansion packs of its popular franchises going forward. 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 #3 (Hold).
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