EA Earnings on Deck, Watching FIFA 12 Sales on Strong Demand for Sports Video Games

October 25th, 2011 by Trefis Team
ERTS: Electronic Arts logo
ERTS
Electronic Arts

Electronic Arts’ (NASDAQ:ERTS) sales of FIFA series of video games on gaming consoles such as the Xbox 360, PlayStation 3 and Wii has been increasing steadily by our estimates. The company launched FIFA 12 last month and hit a record by selling 3.2 million units across all consoles worldwide in less than a week after launch, by their own estimates. [1] Looking at these numbers, it looks like FIFA 12 will easily be able to surpass FIFA 11 sales, something we discussed in a previous note (Read: FIFA Soccer 12 Can Be Bigger Than Fifa 11 For EA) The growing market for Sports genre video games will continue to benefit Electronic Arts (EA) in the future. EA’s main competitors include game developers like Activision Blizzard (NASDAQ:ATVI), Take-Two Interactive Software (NASDAQ:TTWO) and casual gaming mainstays such as Zynga, Playdom etc.

See our complete analysis for Electronic Arts’s stock.

FIFA 12 Sets Historic Record

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Electronic Arts has sold an estimated 3.2 million units of FIFA 12 within the first week from its 27 September launch, which the company estimates is an increase by 23% over last year’s record launch. [1] With astounding features such as Impact Engine, Tactical Defending, Precision Dribbling and the all new EA Sports Football Club and rapidly increasing orders, FIFA 12 could become one of the highest selling franchise game in history for Electronic Arts, beating FIFA 11.

The game has received rave reviews and ratings by critics and news publications like 1UP, USA Today, GamePro and The Guardian. While Gamescom calls it “Best Console Game,” it has also received the prestigious E3 Game Critics award for “Best Sports Game” at E3 2011.

Growth in Sports Video Game Genre

According to a report by The Entertainment Software Association (ESA), video gaming demographic is becoming more diverse, with people of different ages and gender being attracted to video games. The report also suggests that the sports games constitutes 16.3%, which is the highest, of all video gaming genres in 2010. [2] This growth in sports genre will particularly benefit EA as the company makes sizable revenues from sales of sports-related video games like Madden NFL, FIFA Soccer and Need for Speed.

While we estimate Electronic Arts’ sales of FIFA soccer video games will increase from 11.8 million in 2011 to around 12.5 million by the end of our forecast period, Trefis members expect an increase from around 13 million to 15 million during the same period.

We currently have a Trefis price estimate of $20.62 for Electronic Arts’s stock, about 12% below the current market price.

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Notes:
  1. FIFA 12 Scores with Unprecedented Opening Sales and Record Online Play, Press Release, Oct 4, 2011 [↩] [↩]
  2. Essential Facts About Computer and Video Gaming Industry, ESA [↩]