Zacks_Analysts' Blog : EA Sets Dates for Mass Effect 3 - Analyst Blog

Video game developer and publisher Electronic Arts Inc. (ERTS), popularly known as EA recently set the date for the upcoming release of Mass Effect 3: Galaxy at War. The new game is expected to release on March 6, 2012 in North America and on March 9, 2012 in Europe.

Developed by Bioware, a division of EA, the new role playing game (RPG) will be available on Sony Corp.’s (SNE) PlayStation 3 and Microsoft Corp.’s (MSFT) Xbox 360 consoles and also on the personal computer.

The most interesting new feature of Mass Effect 3: Galaxy at War is the addition of the multi-player option. Besides the single player mode, four gamers can also play co-operatively in the new game. For the multi-player missions, gamers will create custom characters to fight on different fronts in the galactic war against the devastating machine-race known as the Reapers.

Another new feature of Mass Effect 3: Galaxy at War is that gamers will have the option to play any one of the six different races which includes Human, Krogan, Asari, Drell, Salarian and Turian.

Bioware also unveiled a new Mass Effect 3: Galaxy at War system. Gamers will have to purchase an online pass code (available with the game or can also be purchased separately) to activate this new system. The new system helps gamers to increase their Galactic Readiness level (last but the most critical level of the game) in different ways.

The system will also help gamers to keep in touch with their BioWare Social Network accounts for the latest Mass Effect 3 news and to access downloadable content (DLC) and add-ons.

EA has earned a name for developing and publishing quality games in the last few years. EA delivered 15 titles that were rated 80 or above by Metacritic in fiscal 2011. The Mass Effect franchisee is of the same genre and has won 200 awards till date. We believe the new game will drive EA’s subscriber base going forward, thereby boosting its market share over the long term.

Our Take

We believe the increasing adoption of social gaming, co-operative gaming and casual gaming bodes well for EA, as the company is better equipped than many new players to gain traction in the various formats 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 reap benefits in the long run.

We believe the digital business will 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.

However, the gloomy macro environment in North America, increasing competition from Activision Blizzard Inc. (ATVI) 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 a Zacks #3 Rank, which implies a Hold rating in the short term.