Electronic Arts Games/ iPad/ Opportunity ?

  • Posted: 22 March 2010 12:29 PM

    I have taken a small position in EA $20.00 OTM LEAPS of 2011. I wonder what you think of EA chances of doing well this year? The stock has been on the down escalator for some time and appears to have bottomed in Feb at around $16.00 ... It is currently $18.50.

    My reasoning FWIW is that EA has an iPad in hand and has in the past worked closely with Apple and seem to be on good terms. The launch a week from Saturday will, as we know, will be full of press reports from the media and reviews from users, bloggers and Gamers. We will start to get some download numbers after that and the iPad games will command a higher ( $9.99?) price than the iTouch and iPhone games.

    Also this morning on Briefing.com

    Electronic Arts: Growth prospects solid, management commitment to        
    profitability believable - Wedbush (18.42)                       

    Wedbush hosted an investor visit to EA’s offices in Redwood City, CA and came
    away impressed that management has a clear strategy and an achievable      
    long-term plan. The key goal for FY:11 was to produce fewer, but more      
    profitable games. Management very clearly defined areas for potential revenue
    growth, and outlined cost savings and operating leverage. Company management  
    was outstanding in communicating its vision, and firm thinks that this type of
    straight talk may convince investors to believe in the EA story.

    Not too much risk as the options are cheap ( which bothers me btw) ... 

    your opinion or knowledge on EA?

  • Posted: 22 March 2010 01:03 PM #1

    artman1033 - 22 March 2010 03:40 PM

    Help me with the math:

    There are how many ERTS games already on iPhone?

    What is the price?

    How many downloaded?

    How many iPads do YOU think Apple will sell in ERTS fiscal year?

    Are the iPhone downloads a SIGNIFICANT part of ERTS NOW?

    Artman these are all reasonable questions and I have no answers as I am looking at this
    a little differently.  I am looking for potential momentum ahead of the fact (curve) I do not
    particularly care about nearby earnings only the uptake of games on the iPad and how to play it

  • Posted: 22 March 2010 01:36 PM #2

    Great coverage artman…thank you… If it drops on earnings I think I will buy more… There is very little noise on this stock but Carl Icahn picking up TTWO is interesting. I suspect the iPad will change the whole gaming industry and I am way too early but the risk/reward is VG

  • Posted: 22 March 2010 01:44 PM #3

    I’m interested in ERTS as a potential component of an Apple-related portfolio.

    The iPad provides an opportunity to offer games at higher prices and higher margins.

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    Posted: 22 March 2010 02:47 PM #4

    Thanks SNIPUS for the heads-up.  grin


  • Posted: 22 March 2010 05:20 PM #5

    iPhone is gobbling up PSP and Nintendo portable gaming revenue