Electronic Arts (NASDAQ:EA) made a number of notable announcements at E3 this year. The video game giant unveiled several new titles and showed off many of its upcoming releases. Below are three key takeaways from its press conference.
New games are coming
As a video game publisher, Electronic Arts' financial results depend entirely on its ability to release compelling new titles. The company spent most of E3 detailing its upcoming pipeline, the majority of which are slated to debut this year or in 2016.
Unsurprisingly, its sports franchises (FIFA, Madden, NBA Live, and NHL) will receive their regular annual installments this year with updated graphics and improved features. The company also plans to release an expansion pack to its massive multiplayer online game, Star Wars: The Old Republic, and a new entry in its racing series, Need for Speed.
For 2016, Electronic Arts is scheduled to release a sequel to Plants vs Zombies: Garden Warfare, an online, team-based third-person shooter with a cartoon aesthetic. It will also release the fourth entry in its long-running sci-fi RPG series Mass Effect, along with a sequel to the 2008 action game Mirror's Edge. The company also plans to publish puzzle platformer, Unravel, what appears to be low-budget title, one unlikely to have much of an effect on earnings. However, it is a noticeable departure from Electronic Arts' traditional offerings.
Star Wars: Battlefront looks impressive
The most important game in this lineup might be Star Wars: Battlefront. The Star Wars-themed first-person shooter is due to launch on Nov. 17th, just weeks before the release of the next feature film, Star Wars: The Force Awakens. Of all the upcoming titles, this seems most likely to provide a significant boost to the bottom line.
Electronic Arts announced the game several months ago but used E3 to show actual gameplay footage for the first time. Reviews for the game will not show up until just before its launch, but if the E3 presentation was any indication, the game looks spectacular.
Electronic Arts has said its current guidance is based on sales projections of nine million to 10 million copies. That estimate is based on previous Battlefront games (the last of which was released a decade ago) and Electronic Arts' long-running Battlefield series of first-person shooters. Battlefront is being developed by the same studio that produced Battlefield, and the similarities should be obvious to anyone who has played those games. Given the growing mania surrounding the reemergence of Star Wars (the first teaser trailer for Episode 7 has been viewed more than 69 million times on YouTube) management guidance could prove conservative.
Wading into the collectible card game genre
Electronic Arts derives the majority of its sales from traditional gaming platforms -- consoles and PCs -- but mobile gaming is growing rapidly, and Electronic Arts is an active participant. Last quarter, mobile brought in about 13% of adjusted net revenue. In time, it could be much more: Research firm eMarketer expects the market for mobile games in the U.S. to rise 16.5% in 2015.
The company did not spend much time discussing its mobile initiatives but did announce one new title -- Star Wars: Galaxy of Heroes, a collectible card game.
Without too many specifics, it is difficult to judge just how big Galaxy of Heroes could be. But it seems remarkably similar to Hearthstone, a collectible card game rival Activison Blizzard launched on mobile devices last year. Hearthstone has been something of a surprise success for Activision. As of May, Hearthstone, along with newcomer Destiny, had generated a combined $1 billion in adjusted revenue.
Gamers might not take to Galaxy of Heroes with the same enthusiasm, but if they do, it could become an unexpected source of upside in the quarters to come.