Electronic Arts (NASDAQ:ERTS) is poised to make an extremely important move, increasing its concentration on developing video games for the Asian market. This is a move that makes perfect sense -- and signs indicate that this will make Electronic Arts shareholders very happy over the long term.
The video game publisher said Tuesday that it is opening a development studio in Singapore, where it will convert games into at least five Asian languages for distribution in that region. The company's plans for the studio include its evolution into an online game development facility, as well.
It should come as no surprise to those who closely follow Electronic Arts that this is coming to pass. In fact, in its most recent Form 10-Q filed with the SEC, this Motley Fool Stock Advisor pick disclosed its intention to make such a move, stating, "In particular, we believe that in order to succeed in Asia, it is important to develop content locally," with an eye toward expanding and creating local studio facilities in the region.
And of course, the Asian market is ripe for companies like Electronic Arts and its rivals Activision (NASDAQ:ATVI), THQ (NASDAQ:THQI), and Take-Two Interactive (NASDAQ:TTWO). It's not just the large populations in many Asian countries, where interest in technology is a trend that many describe as potentially explosive. There's also the fact that in certain Asian markets, video games have rabid fan bases. Video game playing is rapidly becoming what one might describe as a national pastime, if not a downright addiction.
Meanwhile, it shouldn't be lost on anyone that the console makers find the Asian region of great interest, as well. Monday, Microsoft (NASDAQ:MSFT) said that it will be releasing its Xbox 360 in certain Asian markets in early 2006 (its launch of the console in Japan will occur this coming weekend).
Electronic Arts may look expensive at the moment, with its P/E of 48 (indeed, two Fools dueled in October over whether EA was expensive or not). However, one thing's for certain -- the company is making the right moves when it comes to capitalizing on hot trends in this increasingly important industry.
For more on Electronic Arts, see the following Foolish content:
- Recently, Electronic Arts said it planned online distribution.
- Revisit EA's most recent quarterly earnings.
- Fools dueled over Electronic Arts in October.
Electronic Arts and Activision are both Motley Fool Stock Advisor picks. To see the full spectrum of stocks that David and Tom Gardner have recommended over the lifetime of the service, click here for a 30-day free trial.
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Alyce Lomax does not own shares of any of the companies mentioned.
