In this segment from Motley Fool Money, host Chris Hill is joined by senior analysts Jason Moser, Matt Argersinger, and Ron Gross to discuss the latest report from video game giant Electronic Arts (NASDAQ:EA), which outperformed again last quarter.

Its most popular franchises -- like FIFA, Battlefield, and The Sims -- continue to produce, and when it comes to trends like digital downloads, e-sports, and micro-transactions, it's on track. But the runaway hit in its segment today is Fortnite, which is produced by rival Epic Games. Should EA be worried? The Fools consider its business outlook and its recent track record.

A full transcript follows the video.

This video was recorded on May 11, 2018.

Chris Hill: Fourth quarter results for Electronic Arts came in higher than expected, capping a strong fiscal year for the video game maker. Ron, shares of EA up about 25% in the past year.

Ron Gross: This is a solid report. They continue to put up really good numbers. Beat expectations. FIFA, Battlefield, The Sims continue to get it done. Their digital business, which is very important -- let's get people out of the stores and let's get them downloading games -- up 18%. That's solid. $2.4 billion share repurchase program announced, so everything looks good.

But, the big threat, as we discussed last week with Activision, is these new battle royale games, with Fortnite being the preeminent one. They're gunning for market share here. And as our friends at EA said, "We don't see it as a threat, we see it as an opportunity." So, good luck, guys.

Matt Argersinger: Yeah, I say good luck, indeed. I think in the short-term, with all the attention on Fortnite, it does hit EA's sales in the near-term. But the one thing I'll add to what Ron said is, Fortnite and other games have created this whole allure of esports and competitive gaming and these battle arenas. I just point to, EA is no slouch in that. In the last quarter, 18 million players engaged in competitive gaming using FIFA 18 and Madden NFL 18. That was up 75% year over year. So, EA has a good footprint in e-sports. A lot of companies do. I just think that's an emerging trend you want to watch, for sure.

Hill: I want to go back to something that Matty said when we were talking about Disney, particularly the movie studios, and it's a hit-driven business. One of the things that popped into my mind was John Carter. Do you remember --

Gross: The debacle!

Hill: Yeah, the huge writedown. And, the more Disney keeps putting out hits from the Marvel Universe, the further in the rearview mirror John Carter becomes. I sort of feel like Electronic Arts and Activision Blizzard, just as Disney has gotten smarter and better about making blockbuster movies, it kind of seems like EA and Activision Blizzard are also in a hits-driven business, and it seems like, collectively, they're doing a better job of it.

Gross: I think that's fair. There's no way to get around that. The digital subscription business has helped to smooth revenue somewhat. Microtransactions, where you can buy $5 here or $10 there to upgrade your suit or your gun or your weapon, has helped, also. But I think you're right, it's still a hits-driven business.

Argersinger: Yeah. I think what you're seeing now with a lot of these companies is fewer new titles, and, as Ron said, relying on those really popular core titles, but augmenting them with all those digital additions, which just boosts the profitability for all these games.

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