Electronic Arts

‘

EA

exclusive agreement with

Disney

’s

DIS

Lucasfilm Games to produce

Star Wars

video games is likely to end abruptly. Per a Bloomberg

report

,

UbiSoft Entertainment


UBSFY

will be publishing an open-world

Star Wars

game developed by

The Division

maker Massive Entertainment studio.

Reportedly, Julian Gerighty, director of

The Division 2

and

The Crew

, will serve as the game’s creative director, and the title will use Massive’s Snowdrop engine, which enables relatively small teams to create ambitious AAA games. Popular games using the Snowdrop engine include

South Park: The Fractured But Whole, The Avatar Project

and

Mario + Rabbids: Kingdom Battle

among others.

Just like other

Star Wars

games published by EA, the new ones will also follow content continuity shared across all the movies and TV shows produced since the Disney acquisition.

Lack of Gaming Franchise Expansion: A Major Concern

EA has long been dependent on a few well-known franchises like

FIFA, Battlefield

and

Star Wars

for revenue generation. This doesn’t bode well for the company. EA’s failure to expand its game franchise is a major concern for the long haul especially after the loss of the exclusivity deal for

Star Wars

franchise.

Back in 2013, EA had suggested that the company would have exclusivity on

Star Wars

games for 10 years. While EA will keep making games in the future, Lucasfilm Games is free to seek other partners.

Markedly, EA has created some of the most successful games in the history of the

Star Wars

franchise, including

Star Wars Jedi: Fallen Order, Star Wars: Battlefront

and

Battlefront II, Star Wars: Galaxy of Heroes

and

Star Wars: Squadrons

.

However, EA is now expected to release the next installment of

Battlefield

in fiscal 2022, which is disappointing for players. The company is expected to release 14 games in fiscal 2021, including

FIFA 21

and

Madden NFL 21

. Lack of a new

Battlefield

game is also expected to hurt EA’s competitive position against

Activision Blizzard

’s

ATVI


Call of Duty

franchise.

Notably, Activision’s

Call of Duty: Mobile

generated

more than $14 million in player spending

in the first week of its release, per a report by Sensor Tower.

Additionally, in December 2020, Activision revealed that the

Call of Duty

franchise’s net bookings surpassed $3 billion over the past year. Additionally,

Call of Duty: Modern Warfare

sold more units than

Call of Duty: Black Ops 4

. Activision stated that it will make frequent content updates to

Call of Duty

and expand the franchise’s presence across platforms and geographies.

Gaming Lineup for 2021 to Aid Growth

EA is also set to launch

It Takes Two

, a co-op gender-bending gameplay, in collaboration with Hazelight Studios. The game will be available on consoles and PC from Mar 26, 2021.

Additionally, the availability of new

Madden NFL 21

and

FIFA 21

on next-generation Xbox Series X|S and PlayStation 5 consoles worldwide is likely to boost user base and top-line growth.

Notably, for fiscal 2021, EA expects revenues of $5.625 billion and net bookings of $5.95 billion. The Zacks Consensus Estimate for fiscal 2021 revenues is pegged at $6 billion, indicating 15.1% growth from the figure reported in fiscal 2020.

Moreover, this Zacks Rank #3 (Hold) company has agreed to acquire U.K.-based racing game developer Codemasters for an enterprise value of roughly $1.2 billion, outbidding rival Take Two Interactive’s offer of about $994 million.

You can see

the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here

.

Codemasters is popular for the

DiRT

and

Formula 1

racing games. The combination of Codemasters racing franchises and EA’s

Need For Speed

as well as

Real Racing

mobile game is expected to boost user growth and expand EA’s portfolio offerings. The transaction is anticipated to be completed in the first quarter of calendar 2021.

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