Electronic Arts Boosts Gaming Lineup With Need For Speed Heat

Electronic Arts (NASDAQ:EA) game portfolio strength has been its major growth driver in recent times. The company’s first-quarter fiscal 2020 results benefited from strong popularity of its well-recognized franchises, FIFA, The Sims 4 and Madden NFL.

The company has a strong slate of game releases lined up including the recently unveiled Need for Speed Heat. The latest title in the popular racing franchise is scheduled to be available from Nov 8 on PC, PlayStation 4 and Xbox One.

Apart from Need for Speed Heat, EA’s other upcoming games are NBA Live 20, Plants vs. Zombies, and Star Wars Jedi: Fallen Order. EA plans to bring at least 20 new content drops and expansion packs to The Sims franchise in fiscal 2020.

Notably, EA has been one of the top-performing gaming stocks on a year-to-date basis. Shares have returned 13.5% year-to-date outperforming the industry’s rally of 9.3%.

Year to Date Performance

Need For Speed Heat Details

The game will have two series wherein players can race through fictitious but detailed urban settings of ‘Palm City’ for a daytime competition called the Speedhunters Showdown.

Players can earn money to buy a fleet of high-performance, customizable cars. At night, players can chase for a currency called ‘Rep’ in an underground series racing against corrupt cops.

Portfolio Strength to Drive Top Line

EA’s top line is expected to benefit from multiple game launches in the rest of fiscal 2020. For fiscal 2020, EA expects GAAP revenues of $5.38 billion and net bookings of $5.1 billion.

Moreover, the company expects the digital business to continue to grow primarily on the back of live services and a strong mobile business.
For fiscal 2020, digital net revenues are expected to be $4.18 billion. Packaged goods & other net revenues are anticipated to be $1.2 billion.

Additionally, the company’s premium and extra content services are witnessing significant market traction, which is also a key catalyst in driving the top line.

Furthermore, esports is also helping the company to expand its global user base by growing internationally in regions like China, Korea, the Middle East and more.

However, intensifying competition in the video game space from the likes of Activision (NASDAQ:ATVI) , Take-Two Interactive (NASDAQ:TTWO) and Gluu Mobile (NASDAQ:GLUU) is likely to hurt user engagement and viewership.

Currently, EA carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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