The Electronic Art of Profiting

by Helen Moss Financial Analyst

Electronic Arts, Inc. (EA) is the developer, publisher, marketer, and distributor of video games. The company was a pioneer of the home computer games industry and was founded by Trip Hawkins on May 28, 1982. The stock price of the company has increased from $14.55 to $26.07 per share, soaring by 79%. It has increased due to the margin expansion of the company, high growth in digital sales and two positive events which boosted the share price of the company.

In the fourth fiscal quarter of 2013, the company’s digital revenue has increased by 45% and it helped the company to mitigate the negative impact of the 25% drop in the revenue of publishing packaged goods. All the business units in the digital revenue segment have witnessed an increase in revenue. The major increase came from Full-game downloads whose revenue has increased by 65% on YOY basis, followed by the subscriptions and in-game advertising segment, Extra downloadable content (DLC) and the mobile gaming segment which have soared by 54%, 35%, 31% on YOY basis respectively. The total revenue of the company has increased by 6% compared to the previous year.

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