Electronic Arts (Nasdaq: ERTS) hasn't quite figured out how to stay relevant in the all-new video game market -- and not for a lack of effort.

The old one was pretty simple: EA and Activision Blizzard (Nasdaq: ATVI) dominated mainstream title sales with franchises like Madden NFL, Guitar Hero, The Sims, and Call of Duty. On occasion, upstarts would steal the spotlight for a minute; Take-Two Interactive (Nasdaq: TTWO) still does this every time the Grand Theft Auto franchise gets a fresh coat of paint. And of course, Nintendo (OTC: NTDOY.PK) ruled sales charts overall thanks to a bevy of top-selling titles unique to the market-leading Wii console.

But then Apple (Nasdaq: AAPL) came along with the first iPhone just as Facebook turned casual browser-based gaming into a juggernaut, and suddenly the gaming world had changed.

Now, you can't sell anything without a clear strategy for online, social, mobile, casual gaming -- preferably all rolled into one. Epic quests have given way to achievement badges for harvesting 100 types of turnips. And woe betide the game that doesn't get along with the standard Web browsers on iPhones and Androids. Nintendo, once bulletproof enough to define its own path, now looks ridiculous for actively standing apart from the mobile/social revolution.

So EA is doing its best to stay in the game. The Sims Social is currently the second-most popular Facebook game, according to EA's estimates. The PopCap Games acquisition has closed, so EA now stands behind the popular -- and topical -- Plants s. Zombies product as well. Digital sales in the just-reported second quarter jumped 30% year over year, and these forward-looking strategies got top billing in the earnings release.

That's great, because it means that EA is thinking hard about the issues that matter most in today's changing market landscape.

But is it good enough?

Total second-quarter GAAP revenue gained 13% year over year, largely thanks to the digital push. But adjusted earnings were slashed in half to land at $0.05 per share, and the operating cash flow was 57% more negative. On a trailing basis, to smooth out seasonal effects and single-shot hits or misses, adjusted earnings are up but cash flows are down.

I'd sum that up as a negative general trend. But Mr. Market seems to disagree: EA shares have climbed 47% in 2011, absolutely crushing Activision and the Dow Jones (INDEX: ^DJI) market benchmark. Stubs are trading at 19 times forward earnings, which is pretty rich next to 7.6 times forward estimates for Zumba guru Majesco Entertainment (Nasdaq: COOL). Moreover, you've seen EA buying its way to 13% sales growth while Majesco is on a 61% growth trajectory with 100% in-house, organic projects. EA rarely looks good in these head-to-head comparisons.

I'm thinking that EA investors are setting themselves up for a fall here. Will the gaming titan sink or swim? Only time will tell. Add Electronic Arts to your Foolish watchlist for a direct line to news and analysis on the stock so you won't be blindsided by whatever comes next.