I am not sure if what I am going to say next is really the case, but I associate computer gaming with youth. While I still enjoy the odd hour or two trying to outflank the Takeda as I progress towards Kyoto, or sending the Krogan Grunt to soften the Geths; family, financial markets or plain guilt preclude me from the necessary commitment to really get lost in the virtual experience. Younger people probably have only to balance the deadlines till the next exam and the attraction of WASD.
So it is with some nostalgia that I review Electronic Arts. This company has accompanied gamers throughout the 90s up to this very day – practically all my adult life. From the Command & Conquer series, Battlefield, FIFA, The Sims and the great Plants Vs Zombies, electronic Arts also absorbed Bioware, publishers of Baldur’s Gate, Dragon Age, Mass Effect and Star Wars: The Old Republic.
Nowadays I am more concerned with the financial position of the company. Luckily Electronic Arts' financial position has moved with the times; the company has increase in value in line with the support received from the gaming community. As a result, the share price has beat all expectations increasing by over 650% in the past 5 years, 50% in the past year and 20% year to date.
EAs share price is expected to continue to increase if millions of gamers continue to enjoy EAs games across consoles, mobile and PC. This is a company that thrives on electronic gaming success. EA offers a diverse portfolio across platforms, geographies and business models. Throughout 2018 and 2019 EA will be launching games across five different genres, on three different platforms. Growth is expected in full-game downloads, subscriptions, extra content and mobile business.
The main cash generating games this year are expected to be;
Star Wars Battlefront II
For EA Battlefront II was a learning experience. Players would have been able to buy loot boxes which provided an ‘unfair’ advantage, albeit a series source of cash flow for EA. However, following series complaints by the gaming community, the feature was removed before launch and Battlefront II was a success with gamers. EA additional content will be added to prolong the life of the game.
FIFA
Although I still consider Pro-evolution superior, FIFA continues to thrive as one of the world’s leading entertainment properties. On console alone, the FIFA franchise had nearly 42 million players during 2017, and FIFA 18’s unique player base grew 10% year-over-year from launch through December 17.
FIFA Mobile added another 26 million players in the quarter to its total player base and millions more joined the FIFA experiences in Korea and China in 2017.
Other PC
Battlefield 1 has more than 25 million players’ live to date, putting it on a similar growth trajectory as Battlefield 4’s massive community. The Sims 4 had another extraordinary quarter following the launch of the highest-performing expansion pack to date, and brought the game to consoles for the first time. Need for Speed Payback also brought new experiences to long-time fans this quarter.
Mobile games
On mobile, EA intend to bring in more players into their network from across the world through the unique reliability of EAs network infrastructure. From Star Wars Galaxy of Heroes to large, long-term communities in EA SPORTS titles, The Sims FreePlay and others.
With this in mind the further upside should not be an issue.
Disclaimer:
This article was issued by Antoine Briffa, investment manager at Calamatta Cuschieri. For more information visit, www.cc.com.mt. The information, view and opinions provided in this article are being provided solely for educational and informational purposes and should not be construed as investment advice, advice concerning particular investments or investment decisions, or tax or legal advice.