Electronic Arts Inc.
) free-to-play division, Phenomic, recently announced the worldwide
Command & Conquer Tiberium Alliances
. This is a browser-based multi-platform free- to-play massively
multiplayer online ("MMO") game, which went live after completion
of beta testing.
The MMO includes real time strategic ("RTS") techniques and
challenges gamers to embark on a journey for world domination. In
the course of the game, one has to ally with other players, produce
and collect valuable resources and also fight battles to conquer
and command new territories.
The game is available in 11 languages that include English,
Spanish, Portuguese, Brazilian, Portuguese, French, German,
Italian, Dutch, Polish, Russian and Turkish. In the quest for
gaining new territories and to keep a vigil on allies and enemies
alike and monitor their every move, gamers have the option of
choosing between the two groups, the Global Defense Initiative
("GDI") or the Nod.
The game will also be available on mobile devices such as
smartphones and tablets, thereby making it accessible on the
In December last year, EA's BioWare division announced the
revival of this popular franchise through a new installment of
Command & Conquer: Generals 2
, a sequel to the 2003 release of
Command & Conquer: Generals
. The company plans to release
Command & Conquer: Generals 2
exclusively for PCs in 2013 .
Free-to-play games, popularly known as freemium games, have
become a rage among gamers. Although gamers access the game for
free, developers and publishers earn revenues through the sales of
in-game items and advertisement. The freemium model has gained
further momentum with the increasing popularity of social games,
co-operative games and mobile games.
According to research firm IBISWorld, social gaming is expected
to reach $11.3 billion by 2016. The worldwide market for virtual
goods was worth $9.0 billion in 2011 and is expected to touch the
$15.0 billion mark by 2014 according to market intelligence firm
In-Stat. As per Juniper Research, revenues from purchases of
virtual goods totaled $2.1 billion in 2011 and are expected to grow
to $4.8 billion by 2016.
According to ABI research, mobile gaming is expected to generate
$16.0 billion in revenues by 2016, a massive increase from
approximately $5.0 billion reported in 2011. It is believed that
the social gaming market will further benefit from increased usage
of smartphones and tablets going forward.
In this scenario, EA has been focusing on building its social
free-to-play portfolio to counter strong competition from the likes
) and also to offset declining sales of its core packaging
division. Incidentally, in the recently concluded quarter, EA's
Publishing Packaged Goods and Other Revenue suffered a 22.9% slump
with Distribution Packaged Goods Revenue plummeting 43.9% on a
year-over-year basis. However, revenue from the digital segment
rose 58.6%, fuelled by a 23% increase in revenue from mobile and
other handheld devices. Moreover, the Sims Social and PopCap Games
also contributed to the uptrend in digital revenue.
EA's strategic acquisitions of Klick, PopCap games and Playfish
over the last couple of years have strengthened its presence in the
social and mobile gaming market. The company has an important
partnership with Facebook, which has helped it to counter
significant competition from Zynga.
We have a Neutral recommendation on Electronic Arts over the
long term (for the next 6 to 12 months). Currently, Electronic Arts
has a Zacks #3 Rank, which implies a 'Hold' rating in the short
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