Will EA Fumble "Madden 25" Tomorrow?
As the NFL heads into its final week of exhibition games, football fans know that it's time to pick up Electronic Arts' Madden 25.
It's an annual rite for the many gridiron fans who also happen to be gamers, and EA's been cashing in for a long time. It's been putting out the annual installments for a quarter of a century, hence the football simulation's commemorative title this time around.
It's easy to get excited as the game hits stores tomorrow. Even without the new features and enhanced graphics that come with Madden 25, fans of the series would pick up the game just to get the updated NFL rosters. EA has an exclusive license with the pro league, and that's been enough to shake out most of the other football video games on the market.
GameStop -- the leading standalone video-game retailer, with more than 6,500 stores -- delighted investors last week by forecasting that comparable-store sales will rise by at least 11%. That's a big step up after posting nine consecutive quarters of negative comps. However, before EA investors begin doing the wave, keep in mind that Madden 25 won't necessarily be a big reason for that Lambeau Leap.
Take-Two Interactive will own this quarter with next month's Grand Theft Auto V. Yes, Madden 25 will be huge, but it's also being pitted against last year's Madden 13. The upticks in recent years have been minimal, and this year may prove to be particularly challenging for EA.
The Xbox One and PS4 will roll out in November, a little more than midway through the NFL regular season. The systems are built on a new chip architecture that won't play older disc-based games -- at least not organically. With some folks saving up for the system, others trading in their old systems to pay for the new consoles, and the understandable reluctance to buy software for what will soon be dated consoles, we could see demand for EA's annual update come in lighter than in the previous years.
Investors don't seem to be worried. The stock hit a four-year high on Friday, even though the video-game industry is coming off years of declining sales and analysts see EA's revenue climbing at just a 6% clip in fiscal years 2014 and 2015.
The climate should be kinder when Madden 15 comes out next year, but don't be surprised if this year's installment doesn't play out on the field the way it's being drawn up in EA's playbook.
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The article Will EA Fumble "Madden 25" Tomorrow? originally appeared on Fool.com.Longtime Fool contributor Rick Munarriz has no position in any stocks mentioned. He's also been a Miami Dolphins season ticket holder since the year before the first Madden game came out. It hasn't been fun lately. The Motley Fool recommends Take-Two Interactive and owns shares of GameStop. Try any of our Foolish newsletter services free for 30 days. We Fools don't 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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