Zacks_Analysts' Blog : EA Releases New NBA Game - Analyst Blog

Video game publisher and developer Electronic Arts Inc. (ERTS), popularly known as EA, announced the availability of its new game NBA JAM: On Fire Edition. Gamers will be able to download the game for $14.99 on Sony Corp.’s (SNE) PlayStation Network and for 1200 Xbox points on Microsoft Corp.’s (MSFT) Xbox LIVE Arcade.

NBA JAM: On Fire Edition features new artificial intelligence (AI), which allows gamers to read the opponents tendencies and make his own moves accordingly. The new game also allows players to select a team of their own choice apart from the 30 current NBA teams. The game also allows players to select from a host of unlockable characters, mascots, legendary and international players.

Gamers can also play solo games or team up with friends to play online championships. Gamers can also play cooperatively to compete in a series of challenges against superstars and legends of all 30 NBA teams.

NBA JAM: On Fire Edition is a basketball video game developed by EA Canada and published by EA Sports. The game also includes additional animations and commentary by legendary NBA Jam announcer Tim Kitzrow, which is an added attraction of the game.

EA remains focused on developing its digital platform and the new fully digital version of the NBA game reflects its policy. We believe the digital business is expected to be a key growth driver for EA going forward, as it offsets weak growth from packaged goods. EA has launched Origin, its first online service, through which the company plans to sell its downloadable titles directly to customers.

EA expects the digital business to continue to grow in fiscal year 2012 and beyond, primarily driven by strong growth in the online social gaming and mobile businesses. We believe that EA is better equipped than many new players to gain traction in the digital format with its variety of titles and massive fan following. Additionally, the strategic acquisitions made by the company in the field of social and casual gaming platforms will be beneficial in the long run.

Recommendation

We believe that EA boasts a strong product pipeline for fiscal year 2012, which should allow it to generate strong growth through the current fiscal year and beyond. We believe that high quality titles, strong product line, increasing exposure to online and social games and diversification of the portfolio guarantees market share gains over the long term.

However, the gloomy macro environment in North America, increasing competition from Activision Blizzard Inc. (ATVI) and Take Two Interactive Inc. (TTWO) and weak video game results over the last 12 months compels us to remain on the sidelines.

We, therefore, have a Neutral recommendation on Electronic Arts over the long term (for the next 3 to 6 months). Electronic Arts has Zacks #3 Rank, which implies a Hold rating in the short term.