Is anyone other than Zynga (Nasdaq: ZNGA) profiting from social gaming? We'll know a little more when Electronic Arts (NYSE: EA) reports fiscal third-quarter earnings after the bell tomorrow. Here's a closer look at what analysts expect:


Q3 2011 (estimate)

Q3 2010

Estimated Growth

Revenue$1.61 billion$1.41 billion14.2%
Earnings per Share$0.93$0.5957.6%

Source: Yahoo! Finance.

History says Wall Street is lowballing. EA has outperformed the average earnings estimate by as little as 5.1% and as much as 225% in each of the last four quarters -- and that's including last year's third quarter, in which revenue fell 15%. This time, new titles and opportunities are fueling top-line gains as peers Activision Blizzard (Nasdaq: ATVI) and Take-Two Interactive (Nasdaq: TTWO) prepare to report double-digit declines.

Three more things to watch
Of course, we're about more than just numbers here at The Motley Fool. As business-focused investors, we're also interested in strategy and company initiatives. Here are three things I'm particularly hoping to hear more about:

  • Star Wars synergy. Tops among EA's list of hit hopefuls is the new Star Wars: The Old Republic PC game that extends into an online multiplayer experience. I'd seriously consider buying it to play with my eldest son if we had a Windows machine in the house. What do other game geeks say? Did preorders surge with Lucasfilm preparing to release the 3-D edition of Star Wars: Episode I to the big screen next month?
  • The Sims on Facebook. While Zynga remains the leading game platform for Facebook, EA has slowly carved a niche by bringing its popular Sims PC game to the social sphere. The last metrics from social game tracker AppData shows The Sims Social ranking 11th among all social games. What other social offerings does EA have in the works? Is working with Facebook profitable?
  • Old standbys. We all know EA for its top hit, the Madden football simulation franchise and related sports games. Are they still outperforming? Is any innovation needed here, and if so, what plans are there for a refresh?

Those are my questions. Now it's your turn to weigh in. What do you expect to hear from Electronic Arts tomorrow? How do you invest in video game stocks? Let us know by leaving a comment below.

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