EA's SSX Makes a Comeback - Analyst Blog

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Electronic Arts Inc. ( EA ) recently announced the launch of snow-boarding game EA SPORTS SSX in North America. The game would be made available globally from March 2, 2012.

Gamers can grab a copy of the game from various retail outlets like Wal-Mart Stores Inc. ( WMT ), Best Buy Co. Inc. ( BBY ) and Gamestop Corp. ( GME ). They can also download SSX from Origin for $59.99. The game can be played on Microsoft Corp. 's ( MSFT ) Xbox 360 gaming system and Sony Corp 's ( SNE ) PlayStation 3.

Touted as one of the most anticipated games of 2012, SSX covers nine snow-covered regions ranging from Alaska to the Alps and Himalayas. Players can choose from the different set of characters with varied skill sets and can compete with friends. Thanks to the NASA topographical satellite data, the game has near-perfect topography for each region.

The SSX or Snowboard Super Cross genre games were first released in October 2000 and subsequent titles such as SSX Tricky (2001) , SSX 3 (2003) , SSX on Tour (2005) , received rave reviews. However, the last installment, SSX Blur (2007), did not fare well and the whole franchise faded away. EA's revival of the franchise should be positive for the company as it brings variety to EA's portfolio.  

EA's pipeline consists of high-quality titles and with increasing online exposure, social games guarantee market share gains over the long term. Moreover, EA's shift of business mix towards the digital format bodes well with the current trend in the video gaming industry's massive transition from physical to digital gaming. Digital online games -- including used games, rentals, mobile games and social games -- have gained tremendous popularity in recent times.

However, the gloomy macro-economic environment, increasing competition and weak video game sales results over the last 12 months, compel us to remain cautious in the near term. Competition from Activision Blizzard Inc. ( ATVI ), Zynga Inc. ( ZNGA ) and International Game Technology ( IGT ) may act as the another headwind going forward.

Moreover, the whole video game industry has been plagued by weak consumer spending and troubled economic conditions.

We have a Neutral recommendation on Electronic Arts over the long term (for the next 6 to 12 months). Currently, Electronic Arts has a Zacks #3 Rank, which implies a Hold rating in the short term.


 
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: ATVI , BBY , EA , GME , IGT

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