Why Electronic Arts Is Poised to Underperform


Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, video game publisher Electronic Arts has received a distressing two-star ranking.

With that in mind, let's take a closer look at Electronic Arts and see what CAPS investors are saying about the stock right now.

Electronic Artsfacts

Headquarters (founded)

Redwood City, Calif. (1982)

Market Cap

$4.7 billion


Home entertainment software

Trailing-12-Month Revenue

$4.1 billion


CEO John Riccitiello (since April 2007)

CFO Blake Jorgensen (since September 2012)

Return on Equity (average, past 3 years)



$1.3 billion / $549.0 million


Activision Blizzard


Ubisoft Entertainment

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 12% of the 2,223 members who have rated Electronic Arts believe the stock will underperform the S&P 500 going forward.

Just yesterday, one of those Fools, All-Star badducky, showed skepticism over Electronic Arts' strategic direction:

Major video games are moving hard toward a blockbuster business model. ... This is very bad. It turns production into a form of gambling on big winners to make up for the losses of the sea of failed titles. Add onto that the total inability to predict what will be big? The console market shrinks. The casual game market prefers smaller titles, with smaller teams. The big AAA titles, the MMORPGs, will all fade to black as the smaller indie studios dominate against a sea of mediocre major titles.

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The article Why Electronic Arts Is Poised to Underperform originally appeared on Fool.com.

Fool contributor Brian Pacampara has no positions in the stocks mentioned above. The Motley Fool owns shares of Activision Blizzard. Motley Fool newsletter services recommend Activision Blizzard. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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