August video game sales crush expectations - EA mini-analysis

Instead of summarizing, I'll just link you to the full article at Marketwatch.

I don't mean to toot my own horn, but I bought Electronic Arts (ERTS) on September 4th around $53.50/share in anticipation of news like this. For me, it's easy to do some analysis of EA in my everyday life; every single room that's on my floor (that has a video game console) has some EA football game. Both of its football franchises, Madden and NCAA, are wildly popular. EA's NCAA game is often regarded as the best one, and Madden is now the ONLY professional football game that is released (due to purchase of the exclusive rights to make it, by EA).

Well, Madden was the most popular game in August (by far), placing in the top ten twice because of sales on both Xbox 360 and PS3. I don't know how that will effect EA's earnings, but it's certainly a positive sign.

Even better, in my opinion, is what they have in their pipeline - a game called Rock Band, scheduled for release for this holiday season. It's made to compete with the ever-popular Guitar Hero franchise (which also held two spots in August's top 10). It's made by the same studio that made Guitar Hero 1 and 2, so it has the same popular, user-friendly, familiar interface. However, Rock Band has 3 input devices - a realistic guitar, drum pad, and microphone. Based on the limited information so far, it seems as though you can do all three yourself (at different times), play with other players on the same console, or even possibly be in an online band, connected to players through the magic of the internet.

I think Rock Band will be huge for EA - that's my main reason for being long in it right now. Only time will tell if it will be a success, and if it's a bust, it's not going to be good for EA's stock. For now, especially after this news release, I'm feeling good.