Electronic Arts ( EA ) has recently
released Star Wars: The Old Republic 's first digital
expansion pack named Rise of the Hutt Cartel .
Set in the planet of Makeb, Rise of the Hutt Cartel
takes gamers on a story-driven mission where they fight it out
against 'Hutt Cartel' in the process of passing through five new
levels. The expansion pack will allow gamers to gain access to Game
Update 2.0: Scum and Villainy. The expansion pack is priced at
$19.99, while current Star Wars subscribers will have to pay $9.99,
a discount of 50% to the original price.
The release of the expansion pack is EA's latest initiative to
boost the game's popularity after it launched the Star Wars'
free-to-play version late last year. Star Wars: The Old
Republic is one of the costliest games from EA's stable in
terms of game development and promotional expenses. However, it has
failed to live up to EA's expectations with respect to sales.
Now, by providing a new expansion pack and new levels, EA seeks
to capture gamers' imagination and keep their interest in the
franchise alive. So far, EA has always benefited from the launch of
DLCs and expansion packs for its famous franchises such as
Battlefield and Mass Effect.
For instance, in the recently concluded third quarter, extra
content and free-to-play were responsible for much of EA's digital
revenue growth. EA's DLC and free-to-play micro transaction content
shot up 50.0% year over year to $185.0 million in the quarter.
Archrival Activision ( ATVI ) has also tasted
success with DLCs for its well-acclaimed Call of Duty and StarCraft
We believe that with a wide array of titles and massive fan
following, EA is better equipped to gain traction in the digital
format than most of the other new players. Reportedly, both
Microsoft ( MSFT ) and Sony are
expected to launch their next generation consoles this year, which
will be a significant growth catalyst going forward.
However, we believe that EA faces a number of headwinds that
include a soft video game industry performance and sluggish macro
environment. Additionally, the emergence of free-to-play MMOs by
social game makers like Zynga ( ZNGA ) and EA's
expanding portfolio of free-to-play games are likely to cannibalize
its own product.
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