EA (Electronic Arts) shares: Price analysis before trading

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Information on EA (Electronic Arts) shares

ISIN code: US2855121099

Ticker: NASDAQ: EA

Index or market: Nasdaq

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Elements to consider before selling or buying EA (Electronic Arts) shares

Analysis N°1

The Electronic Arts group should continue to expand its games offering through targeted buyouts. It will therefore be necessary to monitor all of these operations and their anticipated profitability.

Analysis N°2

Electronic Arts also targets public markets and wishes to continue to offer the American government simulation software adapted to defence, medicine, etc...

Analysis N°3

The group is also diversifying by offering more and more training and coaching software in order to become less dependent on the gambling sector alone. In the same way, it is strongly working on its marketing image by offering more and more products derived from its major licences, which enables it to increase its turnover.

Analysis N°4

Finally, EA should be able to count on the multiplicity of its creative studios to release a few blockbusters in the coming years as it has done in the past.

Analysis N°5

However, the market for game consoles on which Electronic Arts is heavily dependent is currently experiencing some losses and a slight decline due to the development of other types of games, both online and on Smartphone.

Analysis N°6

Like its competitors, Electronic Arts is also suffering the consequences of the increasing piracy of its game software, particularly in certain specific countries where legislation is more flexible in this area.

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General presentation of EA (Electronic Arts)

The American group Electronic Arts, also known by the acronym EA, is a specialist in video game publishing. More specifically, it is one of the leading game developers and publishers in North America. It develops and markets video games for various types of media, including :

Video games for game consoles, which enable it to generate more than 70% of its turnover with, in particular, Playstation, Xbox 360 and Xbox One consoles.
Video games for computers that generate 16% of turnover.
Video games for mobile phones, which generate 12.9% of turnover.
Finally, other games such as tablet games, which generate 1.1% of sales.

The games developed by the Electronic Arts group can also be divided into two main groups according to the form of these games and in this way :

Digital game software that can be downloaded online or third-party software generates 59.3% of the group's current turnover.
Physically supported game software accounts for 40.70% of turnover.

It should also be noted that the sale of products generates 54.5% of the company's turnover and that associated services generate more than 45.5% of turnover.

Finally and from a purely geographical point of view, the Electronic Arts group makes more than 56.3% of its profits internationally and the rest in the United States.

Photo credits: ©stlegat/123RF.COM

The major competitors of EA (Electronic Arts)

Let us now discover the competitive environment of the Electronic Arts group with a presentation of its main adversaries in the video game sector and their activities:

Tencent Holdings Limited

First of all, this company was created in 1998 and specialises in Internet and mobile services and online advertising. Headquartered in Shenzhen, China, the group offers social networking, web portals, online shopping and multiplayer online games. Among other things, the group manages the Tencent QQ instant messaging service and operates one of the largest web portals in China and the WeChat instant messaging service.

Sony Corporation

This company is a Japanese multinational that is also very active in the world of video games and is based in the Minato district of Tokyo, Japan. The company operates in various fields such as electronics, telephony, computers, video games, music, cinema and audiovisuals. Through about 100 subsidiary companies, the group operates in 183 countries.

Microsoft Corporation

This multinational computer and microcomputer company is primarily known for its software, but is also responsible for the creation and development of consoles and video games. Microsoft currently employs over 148,000 people and operates in 120 countries around the world.

Apple

Apple is also an American multinational company that creates and sells consumer electronics, computers and software. In recent years, the company has also expanded into the world of video games and now offers online games accessible from its Apple Store platform and on various types of media. It is therefore a major player in this sector compared to Electronic Arts.

Activision Blizzard Inc

Of course, the Activision Blizzard group is one of the major competitors in the field of video games in the world. It is an American developer and publisher of video games. It was created in 2017 through the merger between Activision and Vivendi Games. It is now one of the most popular game publishers in the world. It is notably behind the creation of the world famous game Call of Duty. However, since 2021, the group has suffered from denunciations of sexist abuse.

Ubisoft

Finally, we must also take into account the competition from the Ubisoft group, which is a French company that develops, publishes and distributes video games and was created in 1986 by five brothers. Ubisoft is the owner of many successful franchises such as Rayman, Rabbids, Assassin's Creed and Prince of Persia. The group has also recently diversified its video game franchises into the comic book industry with Les Deux Royaume and into film and television since 2011 with Ubisoft Motion Pictures.

The major partners of EA (Electronic Arts)

Of course and to face this very aggressive competition, the Electronic Arts group can also rely on an effective strategy that includes strategic partnerships and well thought-out alliances with certain other players in this field or in complementary fields. As you can see, the major partnerships put in place by Electronic Arts are not thought out without reason, and are all aimed at improving the group's results and sales. Therefore, it is particularly interesting to keep an eye on all the news concerning EA's future alliances with other companies which may of course have a direct impact on its share price on the stock market. To better understand the value of these alliances, we suggest that you take a look at the recent partnerships that the EA Group has put in place.

Facebook

First of all, in 2010, it is with the social network giant Facebook that the Electronic Arts group set up a 5-year partnership. To do so, Electronic Arts will offer a simpler and more accessible experience for people who buy virtual goods and services via the Facebook platform since the famous Facebook credits will become an exclusive payment method for Electronic Arts' games accessible from this social network. A way to recruit new players by using the growing popularity of social networks.

Microsoft

In 2013, the Electronic Arts group will set up a partnership with a well-known game console manufacturer, but also a competing game publisher, namely the giant Microsoft. This alliance concerns Electronic Arts' sports licences such as UFC, NBA Live, Madden or Fifa 14, which will be made available on Microsoft's Xbox One console and will thus benefit from a new engine called "EA Sport Ignite".

Walt Disney

Finally, more recently, in 2018, the Electronic Arts group is once again doing well thanks to an alliance with the American group Walt Disney with whom it has signed a juicy partnership. Indeed, this partnership of several years allows the game publisher to develop and distribute games inspired by the Star Wars saga around the world. The games developed on this theme should cover the most important segment of the video game market and all the most popular interactive platforms and game types.

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The factors in favour of a rise in the EA (Electronic Arts) share price:

First of all, one of the company's great strengths is its international aspect, but also its ability to develop games for all types of media, whether video games in the form of physical or downloadable software, online games or games for mobile phones and tablets. The games published by EA are adaptable to a wide range of game consoles, including the most popular Sony PlayStation, Microsoft Xbox and Nintendo Wii consoles. Other games are developed to work with all major mobile and tablet devices. In total, Electronic Arts sells its games in more than 35 countries around the world.
The diversity of the gaming segments, which can be seen in detail in the above-mentioned divisions of the group, is also one of the strengths of this company. Some of these segments, such as EA Games or EA Sport, have been very successful with the general public for many years and have contributed to the brand's reputation.
The fact that the Electronic Arts group can exploit certain very popular licences such as the Hasbro games or certain Disney licences is another asset that must be taken into account because the games developed in this theme always prove to be very profitable.
Finally, it should be noted that the Electronic Arts group has, on several occasions, developed games that set sales records as soon as they were released, which clearly reflects the strong brand awareness and the loyalty of the players attached to it.

The factors in favour of a drop in the EA (Electronic Arts) share price:

First of all, let's remember that the Electronic Arts group went through dark times a few years ago with the closing of several studios and staff reductions that hurt investor morale. The group is just beginning to recover from this misfortune.
The group's relative dependence on the game console manufacturers who operate the games developed can also be highlighted as a weak point of the group. This dependence is both economic and technical, as the publisher must constantly adapt to the innovations of these machines from a graphic or performance point of view.
It is also known that the Electronic Arts group's activities and sales are particularly cyclical since most of the group's major games are released at specific and strategic times of the year such as the Christmas holidays. As well, production and distribution management can be complex and a simple error or delay can seriously affect its profitability and sales in general.
Finally, we can once again underline the very strong competition that reigns in the world of video games and the difficulty for Electronic Arts to position itself among a few giants of this industry that compete with ingenious and modern projects to attract new players.

The information supplied here is only for indicative purposes and should not be used without the completion of a comprehensive and complete fundamental analysis of this asset notably taking into account exterior data, future publications and announcements and all fundamental events and news that could influence the strengths and weaknesses or make them more or less significant. This information does not in any way constitute recommendations relating to the completion of transactions or a solicitation to buy or sell an asset.

Frequently Asked Questions

Which companies and subsidiaries belong to the EA Group?

The Electronic Arts Group in fact reunites several entities through subsidiaries that the group owns and operates. These subsidiaries notably include the following companies: EA Sport, Respawn Entertainment, the Bioware Company, Digital Illusions Creative Entertainment, PopCap Games, the EA Gothenburg Company, Criterion Games, Motive Studios, the Maxis Company, Seed, and the EA Vancouver Company.

Which are the significant figures you should know about the EA Company?

The EA Group has received 700 awards in the USA and in Europe since its creation. Over 9,300 people are employed by this company around the world with 8,200 people employed in this company’s development teams. The EA group boasted a stock market capital of over 31,700 million American dollars in 2020.

How to successfully complete a chart analysis of the EA share price?

The chart analysis of a share price requires the use above all of a high quality chart available in real time that can be customised according to your requirements upon which you can display and follow the Electronic Arts share price with various time lines, types of curves or the simultaneous display of certain technical indicators such as volatility or trends. These factors are in fact indispensable for successfully anticipating the probable future price movements of this asset.

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