logged the biggest launch in its history, as
Electronic Arts (
sold more than 1.1 million units in the first two weeks of the
game's release. Developed by EA division Maxis,
was launched on Mar 5. However, technical disruption marred the
most anticipated launch due to "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, a problem it faced during the launch of
in Oct 2011. To salvage the situation, EA deployed additional
servers and also announced to provide registered
players a free version of the game.
The additional server deployment enhanced EA's online
infrastructure over the next two weeks. Server capacity increased
400%, which improved server response by more than 40 times. EA
said that approximately 54% of the 1.1 million unit sales have
been through digital downloads, of which approximately 44% were
through Origin (EA's direct-to-consumer digital download
The modern version of the 1989 classic game,
, has received a metacritic rating of 71 and is expected to be as
popular as its earlier versions. This is primarily due to the
expansive game content, which now allows players to build 16
cities simultaneously, each with different specializations. For
the first time in the franchise's history, EA added multiplayer
feature to the latest game, which further makes the game
attractive in our view.
is one of those popular franchises of EA, which can be played on
a number of platforms including mobile. In Jul 2012, EA released
. Moreover, EA is set to release the latest version of
Mac in spring 2013 (earlier scheduled for a Feb 2013 release). We
believe that the Mac release will further boost the game's
subscriber base going forward.
We believe that with its variety of titles and massive fan
following, EA is better equipped to gain traction in the digital
format than most of its peers including
. EA's digital revenues (35% of total revenues) jumped 8% year
over year to $407.0 million in the third quarter of 2013.
However, we believe that EA faces a number of headwinds in the
near term. Recent top-management changes that include the exit of
its Chief Executive Officer will add volatility to the stock in
the near term. Additionally, sluggish video games retail
sales and an aging console system lifecycle are the other
headwinds in our view.
Currently, EA has a Zacks Rank #3 (Hold).
APPLE INC (AAPL): Free Stock Analysis Report
ACTIVISION BLZD (ATVI): Free Stock Analysis
ELECTR ARTS INC (EA): Free Stock Analysis
FACEBOOK INC-A (FB): Free Stock Analysis
To read this article on Zacks.com click here.