Video game developer and publisher,
Electronic Arts Inc.
) is expanding its mobile product portfolio for
) iOS platform. EA recently gave a live demo of its upcoming mobile
Real Racing 3
on latest iPhone 5. The game is slated to release later this year
on both iPad and iPhone 5.
iPhone 5's large 4" retina display screen along with better
resolution (pixel size : 1136-by-640), powerful processors (A6) and
enhanced graphical qualities add a new dimension to EA's racing
The game's graphical quality is at par with console-based games.
The new iPhone graphic chips allow racers to use rear-view mirrors
of their car, which helps them to keep a track of their competitors
at the time of racing.
Real Racing 3
supports a new GameCenter feature called "time shifted
multiplayer", which allows players to challenge their friend's
performance on the same racing track, even if they are not playing
at the same time. We believe that the new game will boost EA's
mobile subscriber base going forward.
Lately, mobile games have been a major source of revenue for EA.
In the recently concluded first quarter of 2013, revenue from
smartphones & tablets surged 86.0% year over year and
contributed 16% of digital revenue. EA's dominant market share
position on iPad and iPhone was a major contributor to this
We believe that the iPhone 5 will be a major success for Apple,
particularly due to its impressive handset features as well as
enhanced gaming capabilities. EA announced that it will introduce
new games for iPhone 5 in the near term, which will boost its
market share going forward.
We believe that consumers are increasingly spending more on
smartphones and portable devices (such as the iPad) compared to
traditional devices for playing online games. According to market
research firm NPD, mobile now represents the largest gaming
segment, as the number of gamers jumped 9% to 22% over the last 12
We believe that this bodes well for EA, as the company continues
to open up new fronts in social, mobile and online gaming based on
its well known franchises, which is expected to boost its customer
base going forward. Further, EA's innovative product pipeline will
boost its market share in the online gaming market over the long
However, the highly fragmented video game market continues to
witness increased competitive pressures, which are hurting its
overall profitability. This compels us to remain Neutral on the
stock over the long term.
Currently, EA has a Zacks #3 Rank, which implies a Hold rating
in the near term.
APPLE INC (AAPL): Free Stock Analysis Report
ELECTR ARTS INC (EA): Free Stock Analysis
To read this article on Zacks.com click here.