We're just about done with 2006. Businesses everywhere are taking stock of their performance and are reviewing the high points and lowlights alike. Even the Fool is doing a review of the biggies on Wall Street's radar. Electronic Arts (NASDAQ:ERTS), meanwhile, just issued a press release discussing one of its undisputed high points of the year -- the latest version of its flagship football game.
Madden NFL 07, the franchise that EA is synonymous with, has yet again served the software publisher well. After crunching the numbers, EA thinks the title has a good shot at being the biggest seller in the video-game arena in terms of units. More than 5 million copies have moved into the hands of gridiron junkies -- a sales success story accomplished over 10 platforms, including Sony's (NYSE:SNE) PlayStation 2 and PlayStation 3 consoles, Microsoft's (NASDAQ:MSFT) Xbox 360, and Nintendo's (OTC BB: NTDOY.PK) Wii system. Jeff Hwang covered the beginning of this season's Madden mania last August.
Not only are people playing the game in the comfort of their living rooms in the presence of friends and associates, but a fair amount of users are also taking it to the online field. EA states that during the launch week back in the summertime, the Xbox Live service saw 600,000 achievements unlocked and more than 2 million hours of game play. There is obviously a high social value to the game, and this is certainly a factor in the franchise's continued prosperity. It's also good for EA's online ambitions; after all, the thesis for growth in the video-game sector is based, in part, on opportunities for advertisements derived from online activities.
This data is a nice counteragent to recent depressing coverage for EA. The publisher recently received some bad press on the game it developed based on last summer's tent-pole movie picture from Time Warner, Superman Returns. As Rick Munarriz pointed out after EA addressed the Street near the beginning of this month, the title had achieved only a third of its sales goal at that time; it's also been reported that reviews for the game weren't so stellar. This underperformance served as fodder for speculation that the company had gone soft in terms of quality.
I haven't played the game, but I'm not sure you can read much into the failure of the Superman Returns game in regard to the long-term future of EA. Video games are becoming more and more like the movie business -- major flops are inevitable. It doesn't matter whether you are EA or a competitor such as Activision (NASDAQ:ATVI) or THQ (NASDAQ:THQI) -- you will turn out a disappointment from time to time. Although I haven't interacted with the Superman adventure, I did have a fun time with EA's adaptation of Batman Begins for GameCube, so I'd find it hard to believe that the company has suddenly become a milquetoast developer. (I should point out, however, that a fair amount of criticism was leveled at the Batman title as well.)
EA and Madden will forever be linked. The franchise has helped to brand the publisher's sports titles with a lot of valuable equity; indeed, the gaming mindshare loves the lineup and buys enough copies to have a positive impact on shareholder value. It doesn't matter that Superman Returns was a disappointment -- the Man of Steel got some aid from the Man of Football.
EA still has a lot of successful properties in its portfolio, examples being Need for Speed and golf games involving superstar Tiger Woods. It still knows how to construct an exciting pipeline of software. And it remains a viable investment idea going into the new year.
Stay in the investing game with these articles from the Fool:
- Dueling Fools: Electronic Arts
- EA Playing to Win
- EA Still in the Game: Fool by Numbers
- Fool on the Street: EA Expands Its Empire
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Fool contributor Steven Mallas owns shares of Activision. As of this writing, he was ranked 5,243 out of 18,483 investors in Motley Fool CAPS. Don't know what CAPS is? Check it out. The Fool has a disclosure policy.
