Electronic Arts Inc
) launch of its latest game from the "SimCity" franchise was
reportedly affected by technical faults, which arose from "server
instability". EA stated that the problem with the servers was due
to the fact that a large number of players were trying to log on
to the network simultaneously. The game was launched last Tuesday
(Mar 5, 2013).
To salvage the current situation, EA has deployed additional
servers to support the game. Moreover, the company also announced
that it would provide registered players with a free PC version
of the game.
The modern version of the 1989 classic game, SimCity, has
received a metacritic rating of 71 and is expected to be as
popular as its earlier versions.
Though the problem related to the servers is a temporary
issue, we had expected EA to have been more prepared this time as
it had faced similar server-related problems during the launch of
Battlefield 3 in Oct 2011. At that time also, a
higher-than-expected number of player log-ins was cited as the
cause of the problem.
However, we think that too many players logging in is a good
problem to have EA should see higher customer engagement going
forward. However, if the technical problems become a regular
phenomenon, it could have an effect on customer preferences and
eventually affect sales.
We believe that given EA's variety of titles and massive fan
following, it is better equipped to gain traction in the digital
format than most of the other new players. This will also help it
to counter stiff competition from
) going forward.
However, we believe that EA faces a number of headwinds that
include overall weakness in video game demand, particularly due
to weakness in retail sales and an aging console system
lifecycle. Additionally, the huge popularity of free-to-play
games is also cannibalizing higher-priced packaged video games
sales, which is a major concern in our view.
Currently, EA has a Zacks Rank #3 (Hold).
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