Analyst: EA Sports Looking To Broaden Audience

Analyst group Lazard Capital Markets recently hosted an investor tour at Electronic Arts Tiburon, one of EA's primary houses for the development of sports titles including Madden NFL, NCAA Football, and Tiger Woods PGA Tour, to name a few. While there, analyst Colin Sebastian and the investors met with group general manager Steve Chiang, and a group of game producers and designers. Following the tour, Sebastian released new comments on the company and the studio. With development for Madden NFL '09 well underway, Sebastian said the franchise is still EA Tiburon's "crown jewel," but added that "hopes are high" for the next Tiger Woods title, particularly for the Wii, noting that the company's decision to move its development to Orlando from California was helping to improve quality and lower costs. Sebastian also noticed an increased focus on casual games and titles aimed more at a broader audience, including the upcoming NFL Tour, which he says is easier to play than Madden. He added, "As EA has already consolidated significant share in the sports category, we believe that broadening the market for these titles is likely to be the key lever to drive growth." The analyst also said that efficiency in Tiburon's production process is improving, following what he called a "very steep learning curve" in the recent console transition. Explained Sebastian, "Specifically, there is a large amount of development assets (e.g., artwork) now utilized across multiple titles and with future iterations of games." He continued, "In addition, there is increasing leverage over cross-platform development, such as sharing code on Xbox 360 and PS3 SKUs and utilizing common development engines." However, Sebastian also noted that despite the increased number of titles in development, there have been no concurrent staff increases. Finally, Sebastian concluded by observing that EA seems to be using networked gaming to connect more directly with consumers, including multiplayer online games, integration with ESPN and other community features. Sebastian elaborated, "Specifically, EA is experimenting with a number of direct-to-consumer websites, such as EA Sports Gameshow and EA Sportsworld, among others, which the company hopes will generate positive network effects for the brand. In addition, EA recently re-launched its e-commerce site, and indicated that the site is seeing a noticeable up-tick in game downloads and product sales."