Can Madden NFL 13 Save the Video Game Industry?
It's a pretty big event for the NFL-licensed football game. Best Buy (BBY) opened many of its stores at midnight on Monday night to begin selling the console title. GameStop (GME) was offering an EA Sports ball cap to anyone buying the game on Tuesday.
In an industry that has suffered three years of brutal declines, Madden NFL 13 is rare cause for a celebration -- and the industry doesn't want you to forget it.
Going for the End Zone
The industry's excited about the game, because the franchise works.
The beauty of the series is that gamers have little choice but to pay up for the annual installments. EA always finds a way to raise the bar in terms of game play and graphics, but -- more importantly -- all 32 NFL rosters get juggled about every year.
Free agents sign with new teams. Stars get traded. Rookies get drafted. Players retire.
EA -- the country's second largest video game company -- sold more than 1.4 million copies of Madden NFL 12 during the first week of availability last summer, 10% ahead of where it was a year earlier. Perhaps more importantly, digital gross revenue climbed 78%.
Limited Shelf Life
It's not a coincidence that EA puts out this game in late August, just as the preseason is wrapping up. Folks want to buy the game with refreshed NFL teams just as the new seasons are starting. There isn't much demand for the game after the season's over -- especially when gamers know that a new installment is just a summer away.
This is a blessing for EA.
Sure, folks can buy marked down copies of Madden NFL 12 at a third of the price of the new game, but most players will gravitate to the fresh releases.
EA is calling a safe play, but it's one that works. If the publisher doesn't issue a press release in early September praising the first week of sales of Madden NFL 13, it is then -- and only then -- that gamers will have to worry about the franchise potentially peaking.
Motley Fool contributor Rick Munarriz does not own shares in any of the stocks in this article. Motley Fool newsletter services have recommended creating a modified stock repair position in GameStop.