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Nov 10
2004
Non Client
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E M P I R E
R E L A T I O N S
G R O U P
P R E S E N T S T H E
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Gold Star Report
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Overview
With the advent of the Christmas shopping season on the horizon, millions of consumers begin to contemplate their holiday purchases while hundreds of companies evaluate their 4th quarter targets. For many of these consumers, interactive entertainment software or the video gaming industry, is an integral part of a child’s or a grandchild’s wish list. Indeed the video gaming industry has grown from its humble beginnings in the early 1970’s to a competitive 10+ billion dollar industry that caters to every demographic from pre-teen to adults 35+ worldwide.
Electronic Arts Inc., has grown with the industry and become one of the leaders in it. Electronic Arts Inc. (EA) became the first company in the interactive entertainment software industry to achieve one billion in revenues and has maintained its dominance during the last 22 years. This GoldStar report will look at Electronic Arts Inc., its longevity and dominance.
Interactive gaming is not a new arena that was created with the Internet or recent technology. Initially a concept of Ralph Baer (responsible for the Odessey and instrumental in Coleco systems) in 1949 while working for Loral, the industry had its birth in 1971. With the introduction of home computers and improved technology, the industry moved swiftly from Pong to Tetris in 1985. In 1982, Electronic Arts Inc. (EA) joined the burgeoning field with Pinball Construction Set for the Atari 800 and Apple II. This was followed by its entry into sports games with One on One: Dr. J vs. Larry Bird in 1983, Populous in 1989 and Madden Football also in 1989.
EA recognized creating games for multiple platforms as a key element to its success. From its inception, EA has published games for more than 43 platforms including the Atari 800, Apple II, Genesis, Nintendo64, Playstation, Xbox, GameCube and more. Another factor has been the “franchise” of games. Madden NFL 2005 (currently in its 15th year), FIFA Soccer, NBA Live, NCAA® Football, SimCity™, the Sims™, and Ultima Online (launched in 1997) are a few of the titles in EA’s valuable franchise. With this combination of platforms and franchises has come longevity and dominance.
As stated on October 19th, revenues for the six months ending September 30th were $1.14 billion with a net profit of $121 million dollars. EA maintained 80% of the dollars spent on sports games, as stated by CEO Larry Probst during the October 19th earnings conference call, with Madden NFL 2005 selling 4 million copies since launch. The Sims™2 sold over 1 million copies in the first 10 days (The Sims™ franchise has sold a combined 41+million units to date).
Christmas shopping has changed from dolls and plastic army figures to computers, software, cell phones and other devices of the current technology. Along with these changes has come new consumers seeking the latest electronic widget, and toys designed with teens and adults in mind. While many consumers may not find interactive gaming software their preferred choice of entertainment, millions of others find the strong titles, depth and experience of EA their entertainment company of choice. And for the investment community, sharp eyes will follow the trends and sales to extrapolate who was on Santa’s list of naughty and nice come earnings season.
Before making an investment in this security, we advice that you seek consultation with a qualified investment professional.Please read the disclaimer printed in this page.
Product
Electronic Arts Inc. provides its products under the trademarks or registered trademarks of Electronic Arts, EA, EA SPORTS, EA SPORTS BIG, EA GAMES, EA Pogo, Ultima and Ultima Online in the U.S. and/or other countries. A short list of some of the recent games for EA are:
EA SPORTS - EA SPORTS Rugby 2004, FIFA Soccer 2005, EA SPORTS Fight Night 2004, Madden NFL 2005, MVP Baseball 2004, NCAA March Madness 2004, NASCAR 2005: Chase for the Cup, NBA Live 2005, NCAA Football 2005, NHL 2005, Tiger Woods PGA TOUR 2005
EA GAMES - James Bond 007: Everything or Nothing, Harry Potter: Quidditch World Cup, Harry Potter & the Prisoner of Azkaban, Need for Speed Underground, The Lord of the Rings; The Return of the King, Medal of Honor Rising Sun, The Sims Bustin' Out
EA SPORTS BIG - Def Jam Vendetta, NBA Street Vol. 2, NFL Street, SSX 3, SSX Tricky
Ultima Online: Samurai Empire
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In the News
November 3, 2004 - The Company reported operating results for the period ended September 30, 2004. For the period, the Company reported revenues of $716 million and a profit of $97 million as compared to revenues of $530 million and a profit of $76 million for the same period in the previous year.
November 2, 2004 - The Company announced Warren Jenson, Chief Financial and Administrative Officer, will speak at the Harris Nesbitt's Playtime 2004 Investor Conference on November 9, 2004 in New York.
November 2, 2004 - The Company announced that The Lord of the Rings™, The Third Age™ role-playing game has shipped and will be on store shelves in time for the holiday season.
November 2, 2004 - The Company announced that Ultima Online™: Samurai Empire, the highly-anticipated expansion pack to Ultima Online™ began shipping to retailers.
November 1, 2004 - EA raises over $38,000 through its Pogo.com and Club Pogo Online Donation Program in Support of Breast Cancer Initiatives.
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About Us
Electronic Arts Inc. designs, publishes and distributes interactive entertainment software for multiple platforms including the Sony PlayStation®2, Microsoft Xbox®, Nintendo GameCube™, PC, hand-held game machines (such as the Game Boy® Advance) via the Internet and other media.
Key Points
- First company in the interactive entertainment software industry to achieve one billion in revenues
- Excellent distribution channels.
- Announced plans to build a studio in China focused on creating games for this market.
- Significant Cash position with over 1.3 billion dollars.
- Large stable of "franchise" games.
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Key Information
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Current Stock Price
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$47.79
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52 Week Low
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$40.60
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52 Week High
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$55.91
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Stock Symbol
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ERTS
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Exchange
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NASDAQ
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Shares Outstanding
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305,332,110
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Financial Information
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Revenues
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$715,728,000 (9/30/04)
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Profit
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$97,253,000 (9/30/04)
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Total Cash and equivalents
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$1,386,026,000
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Total Assets
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$3,702,655,000
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Total Liabilities
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$705,907,000
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Management
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Lawrence Probst,III |
Chairman, CEO |
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William B. Gordon |
CCO, Exec VP |
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Warren Jenson |
CFO, Chief Admin. Ofc. |
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Don Mattrick |
Pres.Worldwide Studios|
J. Russell Rueff, Jr. |
Exec VP of HR |
Headquarters:
Electronic Arts Inc.
209 Redwood Shores Parkway
Redwood City, CA 94065
(P) (650) 628-1500
Website: www.ea.com
All dollar figures are in U.S. dollars. To obtain copies, please contact Kenneth Maciora at Empire Relations Group Inc. at (516)750-9719.
Download/Print PDF
of this Gold Star Report
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Disclaimer
This Gold Star Report™ contains certain forward-looking statements which involve known and unknown risks, delays, uncertainties, and other factors, not under the Company's control, which may cause actual results, performance, or achievements of the Company to be materially different from the results, performance, or other expectations implied by these forward looking statements. This Profile is prepared for general information only. It does not have regard to the specific investment objectives, financial situation and the particular needs of any specific person who may receive this profile. The information and statistical data contained within have been obtained from sources believed to be reliable but in no way are warranted as to accuracy or completeness. This is not a solicitation of any offer to buy or sell. Empire Relations Group Inc., its affiliates, directors, officers, employees and employee benefit programs do not maintain an equity position, either long or short, in this security at this time. Empire Relations Group Inc. has not received any compensation for the production of this Gold Star Report Copyright © 2004. Empire Relations Group Inc. All rights reserved.
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Gold Star Report
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