Video game giant
Electronic Arts Inc.
(
EA
) and developer 38 Studios is set to release their second
downloadable content (DLC) for
Kingdoms of Amalur: Reckoning
on April 17, 2012. The DLC, titled
Teeth of Naros
, will take gamers to the floating city of
Idylla
, where they will encounter a mysterious race of devoted giants,
Kollossae.
Additionally, in
Teeth of Naros
, gamers will encounter new challenges and battle new enemies with
nine new armor sets, six new shields and 18 new weapons with unique
features along with three new 'Twists of Fate'.
The downloadable content will be available on
Microsoft Corp.
's (
MSFT
) Xbox Live for 800 points and
Sony Corp.
's (
SNE
) PlayStation Network.
Teeth of Naros
can also be downloaded from EA's Origin and Steam, a digital
distribution platform, for $9.99.
Teeth of Naros
would be the second DLC for
Kingdoms of Amalur: Reckoning,
after it launched
The Legend of Dead Kel
on March 20, 2012. So far, EA has always benefited from the DLCs it
launched related to some of its famous franchises. The phenomenon
continued through the last concluded quarter, when mobile and other
handheld devices and DLC drove EA's digital revenue growth
significantly. EA's DLC and free-to-play micro transaction content
spiked 86.0% year over year to $123.0 million in the last
quarter.
Electronic Entertainment Design and Research (EEDAR), a video
game market research firm, estimates that given the increasing
popularity among the Xbox 360 and Play Station 3 console owners,
DLCs will generate $1.0 billion in sales in 2012. EA, with its
famous franchises and timely content pack releases, is expected to
grab a chunk of this estimated DLC sales. EA's rival,
Activision Blizzard Inc.
(
ATVI
), which too has some of the famous franchises of the gaming
industry under its kitty, would also be eyeing for a share in the
billion-dollar opportunity.
Kingdoms of Amalur
has already received a noteworthy response and had sold 330k units
in the US in February, as reported by The NPD Group, a market
research firm. Moreover the game acquired fourth position in NPD's
top ten games in the month of February.
We believe EA's high-quality titles and a robust product
pipeline along with the increasing online exposure and traction in
the social and mobile gaming market are the long-term positive
catalysts.
However, we remain cautious on the company due to the gloomy
macro-economic environment and increasing competition from its
peers. Moreover, the whole video game industry has reported dismal
sales figures over the last 12 months due to weak consumer spending
and troubled economic conditions.
Considering these factors, we have a Neutral recommendation on
EA over the long term.
Currently, EA has a Zacks #3 Rank, which implies a 'Hold' rating
in the short term.
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ATVI
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EA
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MSFT
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SNE
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