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Electronic Arts (EA - Analyst Report) recently announced the availability of Dead Space 3 Awakened, the digital expansion pack of Dead Space 3 game for Sony’s (SNE - Snapshot Report) PlayStation and Microsoft’s (MSFT - Analyst Report) Xbox. Gamers can also get the downloadable content (“DLC”) from EA’s Origin platform. The DLC costs $9.99 or 800 Microsoft points.

Dead Space is one of the most successful franchises of EA. Developed by Visceral Games, Dead Space 3 is the latest release of the trilogy. The game garnered rave reviews and earned a metacritic rating of 79, 78 and 76 for the PC, Xbox 360 and PlayStation 3, respectively.

Dead Space 3 Awakened continues the story of the original game. The DLC revolves around the adventures of Isaac and John Carver, who are left behind in the planet of Tau Volantis. Their mission is to repair the Terra Nova in order to return to earth.

Lately, downloadable contents (DLCs) and expansion packs have been extensively used by EA to keep gamers interested in its game franchises that include Battlefield and Mass Effect. However, the new Dead Space 3 DLC has received mixed response from gamers, primarily due to its short duration and the lack of new gaming assets.

Although EA is yet to confirm any further sequel to Dead Space 3, we believe that the ending of the DLC paves the way for another update. However, the lukewarm response to the DLC may hurt the franchise’s top-line growth in the near term.

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 with a wide array of titles and massive fan following, EA 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.

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

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