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Electronic Arts (EA)-Lucasfilm Games Unveil New Star Wars Title

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Electronic Arts(EA - Free Report) has been the primary beneficiary of the ongoing shift from physical to digital versions of video games. Moreover, the company’s freemium and extra content services are also generating significant market traction.

The company’s shares have returned 5.2% in the year-to-date period compared with the Zacks Toys - Games - Hobbies industry's rise of 3.4%. The Consumer Discretionarysector has tumbled 27% year to date.

Driven by strong performances by its popular franchises, Battlefield,FIFA 22,Madden NFL,It Takes Two,F1 andMass Effect Legendary Edition, Electronic Arts reported revenues of $1.82 billion, up 35.6% year over year in fourth-quarter fiscal 2022.

The company has been focusing on expanding its gaming portfolio in the past few years to attract more users to its platform.

Electronic Arts’ Respawn Entertainment and Disney (DIS - Free Report) -owned Lucasfilm Games unveiled the next chapter of the popular Star Wars action-adventure series, Star Wars Jedi: Survivor, scheduled to be launched sometime in 2023.

Star Wars Jedi: Survivor, developed by the veteran team at Respawn under the leadership of game director Stig Asmussen and in partnership with Disney’s Lucasfilm Games, will be an expansion of the debut title of the Star Wars game series, Star Wars Jedi: Fallen Order.

The newly-unveiled game is being built for the current generation of gaming hardware. It is anticipated to create a deeper and more expansive Star Wars experience for players worldwide when the game launches.

 

Stiff Competition in the Gaming Industry

Over the last two decades, the gaming industry has witnessed a booming growth in capital. The upside was further amplified with the onset of the COVID-19 pandemic. Even after the removal of the restrictions, the gaming industry has been performing spectacularly.

Per a report by Fortune Business Insights, the global gaming market which was valued at $229.16 billion in 2021, is projected to grow at a CAGR of 13.2%, reaching $545.98 billion in 2028. Thus, the global gaming industry is expected to grow significantly in 2022.

These projections bode well for Electronic Arts in the near term. The company anticipates benefiting from its game release line-up for the rest of 2022 and 2023.

EA has tied up with its subsidiary Codemasters to launch EA SPORTS FIFA in July 2022, which is expected to boost user engagement across EA’s platform. The company also stated that it would launch a remake of its classic sci-fi survival horror game, Dead Space, on Jan 27, 2023. In partnership with Middle-earth Enterprises, a division of The Saul Zaentz Company, EA will be adding to its ever-expanding mobile game portfolio a collectible role-playing game (RPG), The Lord of the Rings: Heroes of Middle-earth. This advancement is expected to boost the company’s gaming business in the near term.

The robust growth of the gaming industry and its massive revenue potential has also attracted the attention of a lot of stakeholders, making the competition in the market much tighter.

This has been made more evident by the launch of a MMORPG beta release by Amazon (AMZN - Free Report) called New World.

Amazon’s games vertical, formed in 2012, has not had the best track record with shipping games, as the tech giant tried to move beyond being a seller to a developer. Previous titles from Amazon, such as Crucible and Breakaway were canceled after poor receptions during the testing stage.

However, released in September 2021, New World has been received well by the gaming community worldwide.

Per MMO Populationsdata, New World presently has around 14.5 million players and is currently ranked #15 out of 135 tracked MMOs in terms of players and aggregate server population.

Another interesting development in the gaming industry comes from streaming giant Netflix (NFLX - Free Report) .

Last year, in November, Netflix announced its plans to expand beyond its entertainment offerings and improve its mobile gaming experience. Since then, the company has been expanding its gaming content portfolio.

Recently, the company added four new games, namely, Dragon Up (East Side Games), Moonlighter (11 Bit Studios), Townsmen - A Kingdom Rebuilt (HandyGames), and Exploding Kittens - The Game (Exploding Kittens Digital) to its mobile app. These four titles bring the Netflix catalog to 22 games.

An expanding gaming portfolio and significant partnership deals made by Electronic Arts —currently carrying a Zacks Rank #3 (Hold)— only highlight its emerging strategy as it aims to catch up with its competitors.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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