EA Stock Scores From Surging Madden NFL 13 Sales

September 10th, 2012 by Trefis Team
+17.54%
Upside
140
Market
165
Trefis
EA: Electronic Arts logo
EA
Electronic Arts

Gaming developer Electronic Arts’ (NASDAQ:EA) stock has gained nearly 6% in the past week owing to strong sales of Madden NFL 13. In the week following the release of Madden NFL 13, EA reported sales of 1.65 million units on Microsoft XBox 360 and Sony PS3, a solid 8% increase compared to last year. [1]

Additionally, the company also noted a significant increase in online usage of the latest Madden game. In the first week, EA said that there was a 31% increase in the number of online games played compared to last year, with more than 24 million contests recorded. EA competes with game developers like Activision Blizzard (NASDAQ:ATVI), Take-Two Interactive Software (NASDAQ:TTWO) and casual gaming mainstays such as Zynga (NASDAQ:ZNGA), Playdom, etc.

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See our full analysis of Electronic Arts

EA gains from strong Madden NFL 13 sales

Strong sales of Madden NFL 13 was one of the primary contributors behind EA’s stock growth over the past week. Unlike EA’s other popular sports game FIFA that depends on global sales, Madden NFL franchise primarily depends on U.S. sales. With cool game playing features such as the new Infinity Engine, true player impact, authentic momentum transfer and improved commentary, Madden 13 has quickly climbed to #1  and 2 positions on Xbox 360 and PS3, respectively, in the U.S. top selling video-games weekly chart. Additionally, the new connected careers feature in the game has significantly increased online game-play on Madden NFL 13, which is a major attraction for video gamers.

Franchise sales, including FIFA and Madden NFL sales, contribute a lion’s share to EA’s consoles business, which constitutes 47% of the Trefis price estimate for Electronic Arts’ stock. For 2012, we expect EA’s Microsoft console revenues to increase by 9% compared to last year. However, with the record breaking Madden NFL 13 sales for the initial one week after launch, the figure can easily surpass our estimate.

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Notes:
  1. EA reports strong Madden NFL 13 sales in week one, Source: EA’s IR [↩]