vested
EA Is Shooting Itself In The Foot With 'Apex Legends' And 'Anthem' ... Again
by Dave Thier
Source: Forbes
https://www.forbes.com/sites/davidthier ... 28dd33750e
Free-to-play games
Merrill Lynch upgraded EA's stock to buy, while Piper Jaffray increased its price target on the stock to $99 per share. The next day, analysts at Robert W. Baird hiked their price target to $106 per share.
Apex Legends' success suggests that EA has cracked the free-to-play code -- a formula it could use to produce additional hit games in the years ahead.
Esports
EA's games are particularly well suited for esports. The company's FIFA 19 soccer game was the best-selling console title in Europe in 2018.
Moreover, FIFA's competitive gaming programs saw an 80% surge in total minutes watched last year, and EA signed several new esports sponsors and partnerships.
EA's Madden franchise is also an esports powerhouse. The game is revered by millions of NFL football fans and lends itself well to competitive tournaments.
One problem for a game like "Apex Legends" is that the point-of-view is first-person.
Players don’t see their own character much from this perspective, so skins aren’t a big draw.
"Apex" does offer weapons skins and some paid character options but they’re not as integral as those in "Fortnite".
The Esports Observer reported Thursday that "Apex Legends" had more than 8.2 million hours of viewing on Twitch earlier this week, a single-day record.
The popularity of the game as a spectator endeavor comes as a new report from research firm Newzoo said the esports market could eclipse $1 billion in revenue in 2019.
A search of “Apex support” on Taobao Marketplace, China’s biggest online retail platform, points to more than 200 vendors selling cheats for the latest hit from American gaming company Electronic Arts.
The software claims to enable players, among other things, to see through walls and automatically aim weapons at opponents.
Last week, Apex Legends developer Respawn Entertainment announced on the online forum Reddit that the studio has banned more than 16,000 cheaters since the game’s February 4 launch for the PlayStation 4, Xbox One and Windows personal computers.
Of the $4.875 billion in net revenue that Electronic Arts is guiding to for its current fiscal year, $3.615 billion, or about 74% of the total, is expected to come from digital sales, while the remaining 26% is set to come from "packaged goods & other net revenue."
Its gross margin during its fiscal year 2015 -- a year in which packaged goods made up slightly more than half its net revenue -- was 68.3%, while in fiscal year 2019, its gross margin looks set to be about 73.1%.
Consoles made up 70% of Electronic Arts' sales, PCs made up 14.6%, and mobile represented 15.2% of the company's revenue.
In terms of growth rate over that trailing 12-month period, Console net revenue rose 4.4%, PC sales dropped 10.4% and Mobile was up 21.5%.
Of the $3.75 billion in digital revenue that Electronic Arts generated over the last 12 months, $743 million -- 19.8% of the total haul -- came from full game downloads. Mobile accounted for $804 million, or 21.5%.
The remaining $2.2 billion -- nearly 59% of that total -- came in as a result of what the company terms "live services" (microtransactions, extra content, subscriptions and esports").
EA has worked off an overbought condition with a solid-looking five-day pullback pattern that found support off prior resistance and the 50% retracement level.
For like-minded buyers of Electronic Arts, I’d suggest any purchases of EA stock still be defended with a money stop at $92.35. That’s just below the pattern low and works out to about 6.25% of exposure.
Battlefield V
First came the bugs that frustratingly disrupted the user experience.
Next, players discovered to their chagrin that EA made unnecessary changes to popular gaming modes.
Anthem is technically a brilliant title, but its gameplay is unnecessarily frustrating.
Commentators have praised Apex for being a better, player-friendly version of Fortnite.
Moreover, EA introduced a “ping system” for Apex, which facilitates superior communication among players. It’s such a standout feature that Fortnite did something unprecedented: its developers copied the system.
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