It might seem a tad early to be thinking about springtime as the icy clutches of Old Geezer Winter wait eagerly around the corner, but in the business world, it's all about being ahead of the curve and keeping up on the next development. Which brings me to recent news from Electronic Arts (NASDAQ:ERTS).
Red Sox outfielder Manny Ramirez's image will be on the cover of the case for the next installment in the MVP Baseball series. If you hadn't heard by now, the team from Beantown finally destroyed the curse that rendered all its various incarnations unable to capture a World Series championship for many, many years.
That should play nicely into the hands of Electronic Arts. Electronic Arts says that MVP Baseball 2004 sold over 1 million copies; that's a great number, but it's not in the same league as, say, Halo 2 or an entry in the Madden franchise. Perhaps Mr. Ramirez's aura in terms of being the MVP of the 2004 World Series will act as a useful catalyst for achieving even higher sales results when MVP Baseball 2005 hits the retail shelves sometime in the spring.
The holiday season is rocking now -- console systems from Sony (NYSE:SNE), Microsoft (NASDAQ:MSFT), and Nintendo are rapidly flowing through the points of sale at places like Best Buy (NYSE:BBY), Target (NYSE:TGT), and Wal-Mart (NYSE:WMT). This means that software from publishers like Activision (NASDAQ:ATVI) and THQ (NASDAQ:THQI) is also jumping to the next level. Revenues during this time obviously are bound to be pretty hot, but I do have to echo the ambivalence of colleague Jeff Hwang in an article entitled EA Signals Weakness?
In that piece, Jeff discussed the pros and cons of Electronic Arts' recent initiation of an aggressive pricing strategy meant to attract value buyers and/or casual gamers to the company's line of sports-themed products; true, a whole new category of players might be ensnared by the price cuts, but it's still a bold initiative. It remains to be seen how the move will affect the next earnings report, but devaluation of core properties can sometimes be to investors what cloves of garlic are to a clan of Nosferatu.
For now, investors in Electronic Arts and its brethren can look forward to the post-Thanksgiving rush by parents and relatives to perform their annual Yuletide diligence and get those hot video games. Hopefully the pricing pressure in the marketplace will be balanced out by gains in sales volume, sparing the sacrosanct profit margin any of the holiday blues.
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Fool contributor Steven Mallas owns none of the companies mentioned.
