0

Companies of E3 2017: Electronic Arts EA Play

 

It’s time!

 

Electronic Arts $EA has kicked off its EA Play fan event, marking the unofficial start of the biggest gaming convention of the year, E3! I don’t think I mentioned in my last post, but I will be recapping as much as possible from companies involved this year, in written form of course, so stay tuned for more.

 

Now that EA has wrapped up its show, let’s run down what it announced and how it compared to what I wrote about earlier.

 

What It Showed:

 

Madden NFL 18: Story mode featured, called “Long Shot.” Similar to what EA debuted in last year’s FIFA title.

 

 

Battlefield 1: EA reveal that the game has had 20 million players since release last year. New content was revealed: “Night” maps, In The Name of the Tsar (trailer above), soliders and battles from the Eastern front during WWI, 6 new maps. New characters from the Russian army. and the “Women’s Battalion of Death.”

 

 

FIFA 18: It’s EA’s biggest game, FIFA! Above is the gameplay reveal, this year’s game will also have an expansion on last year’s story mode featuring fictional player named Alex Hunter. Also, look at that sweet “sweat tech.”

 

 

Need for Speed Payback: “Most diverse open world in a N4S game ever.” Abandoned classic cars you can save and customize. Lots of racing.

 

 

A Way Out by Hazelight: This was the only EA Originals game shown, which is a split-screen co-op prison break game that you can play locally or online. Gameplay is below.

 

 

EA also touched on what it calls its Search for Extraordinary Experiences Division (SEED) team, a small group within EA working on innovative and unique projects.

 

 

BioWare’s ANTHEM: Previously known as code name Dylan, this was the second new IP the company revealed. Teaser shown above, it said that more will be shown tomorrow alongside Project Scorpio during Microsoft’s press briefing.

 

 

NBA Live 18: EA is trying to compete with Take-Two’s NBA2K franchise yet again. Introduced another type of single-player mode, seems to be a theme. Called “The One.”

 

 

Star Wars Battlefront II: This was the show’s big finale. It has three times the content of the original game, will have free content including characters such as Finn and Phasma. Multi-player, co-op and single-player modes. I mean, and it also has Yoda being a bad-ass, how cool is that?

 

 

Above is a look at the multi-player trailer for Star Wars Battlefront II.

 

 

 

FIFA 18 on Nintendo Switch: The Switch version of FIFA 18 didn’t show up during EA’s press conference, but it has popped up on EA Sports’ website. Looks like it will have the same features as the version on other consoles, including Ultimate Team, Career Mode, Switch Kick Off and Local Seasons. Releases on September 29th.

 

What It Didn’t Show (Yet):

 

The Sims 4. No mobile games, but expect Star Wars Galaxy of Heroes at the fan event. Visceral Games/EA Motive and Respawn Entertainment Star Wars projects. Fe by Zoink. Sea of Solitude by Jo-Mei Games. Dragon Age (this was my long shot, looks like this will be under wraps until well after we know more about BioWare’s new game ANTHEM).

 

Thanks for reading and see you tomorrow!

 

-Dom

0

Bottom Line: Disney Record Results But Market Outlook Negative?

Walt Disney Co. (DIS)

Bottom Line: Star Wars brand drove a quarter with record income for DIS, but contraction in Media Networks is a concern for analysts and investors going forward. It should be an interesting year for DIS as pipeline includes Finding Dory, Captain America: Civil War, more Disney Infinity but the main areas to watch are Star Wars merchandise and the future of ESPN.

Questions: What other areas or products can drive growth for DIS this year? Are you positive overall on ESPN? Can Star Wars alone, between licensing and merchandise, abate concern with Media Networks at least this year?

Dissecting a huge media conglomerate’s financials is a monumental task, so I won’t necessarily be posting every single stat or figure but want to address the above question while overviewing the company’s current business.

DIS reported 2016Q1 earnings this week, with record net income however the market sentiment is still negative as indicated by the firm’s stock movements after earnings release. So what’s behind this divergence? The firm’s main profit drivers are Media Networks (cable channels, ABC & ESPN etc) and Studio Entertainment (movies, including Star Wars and Marvel titles) with the latter almost doubling income since last year due to Star Wars: The Force Awakens release.

DIS Segments 2016Q1

The key here is that Media Networks income contracted since last year despite sales being up, as costs are also increasing on a relative basis. Driving this is partly timing, as the College Football Playoffs occurred during this quarter, but also rate increases for sports programming and production costs going up. A general concern is the sentiment around ESPN in particular, where programming costs are up and cable subscribers are “cutting the cord” adversely impacting advertising potential. To combat this, DIS is trying to expand ESPN mobile offerings, as WatchESPN now displays all live shows and events in order to have more eyeballs on advertising. I’ve even heard rumblings that DIS should consider an approach similar to HBO Now, offering ESPN content separate from a cable contract for a subscription fee. I’d say this is a last resort, at present.

DIS Media Networks 2016Q1

DIS Studio Entertainment 2016Q1

As for gaming, the Consumer Products & Interactive Media is actually quite healthy but this of course seasonal and this quarter included holiday 2015. Revenue and income were boosted by licensing from Star Wars i.e. Star Wars: Battlefront while Disney Infinity results were lower (sales volume down, inventory up). Even compared to last year, when Frozen merch was all the rave especially with kids accumulating annual sales of $3 billion, Star Wars gear has just begun to reap benefits and Nielsen expects it to account for $5 billion in revenue across this year.

Last note is that DIS results are being propped up by the steady Parks and Resorts segment, up more than 20% since last year driven by Americas region. I see this as continuing to be a key component of the firm’s diversified approach, especially as the cable landscape changes and products/interactive media remains seasonal and dependent on the strength of content and titles.

Sources: Walt Disney Co. Form 1oQ February 9, 2016; Walt Disney Co. Q1 FY2016 Earnings; Nielsen

-Dom