Dueling Fools: Electronic Arts

I'm showing my age by saying this, but I remember goofing around with many of the early Electronic Arts (Nasdaq: ERTS  ) titles during high school. I used to make computerized pinball machines with Pinball Construction Set. I dealt with the rudimentary graphics as I dribbled away in some One on One hoops action. I even took part in a neighborhood league where we'd input baseball-card stats into the original Earl Weaver Baseball game.

Good times.

Apparently, the times are getting even better. Next-generation consoles by Sony (NYSE: SNE  ) , Microsoft (Nasdaq: MSFT  ) , and Nintendo (OTC BB: NTDOY.PK) are raising the bar on what games can do, and the gamers are all over it. Market-research firm NPD reported a better than 22% rise in video software sales last month over August of 2006.

As the industry leader -- with a market cap greater than those of its nearest rivals, Activision (Nasdaq: ATVI  ) , Konami (NYSE: KNM  ) , and THQ (Nasdaq: THQI  ) , combined -- EA is a popular company. But is it too popular? Not all Fools agree.

Tim Beyers is our bear this week. He thinks the company's valuation is too rich. I'm the bull. I argue that the only thing that's rich will be EA's investors.

Which Fool will deliver the winning argument? That's what this week's bout is all about.

Duel on!


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