(ATVI) Electronic Arts Unveils New Packs for The Sims 3

Video game developer and publisher Electronic Arts (EA) recently unveiled expansion and stuff packs for The Sims 3 franchise, scheduled to release in 2013 on PCs. The Sims 3 70s, 80s & 90s stuff pack is the first of the lot and will be followed by a couple of expansion packs namely The Sims 3 University Life in March and The Sims 3 Island Paradise in June 2013.

The Sims 3 70s, 80s & 90s is the eighth stuff pack for The Sims 3, which offers clothes and stuff of these decades that players can use to decorate their characters. The pack is set to release on January 22 in the US and on January 24, 2013 in Europe.

The Sims 3 University Life Limited Edition pack enables gamers to attend university in an all-new college town. The pack contains a new party pack and is already available for pre-order. The second expansion pack, The Sims 3 Island Paradise allows gamers to set sail in search of new uncharted islands. The game offers tools, which players can use to build their own resorts.

Moreover, EA announced another untitled stuff pack, set to release in the fall of 2013, which will offer clothes and stuff used in various movie sets. Additionally, the company expects to release another untitled expansion pack at the same time that will enable The Sims characters to travel to the future.

The Sims franchise was released in 2000, and ever since, EA has sold more than 150 million copies of the game and its sequels in 22 languages across 60 countries around the world. To date, the game has generated more than $3 billion in revenues for EA. We believe that the new expansion packs will boost revenue growth going forward.

Lately, the frequent release of expansion packs and downloadable contents (DLCs) have been the lifeline of aging game franchises. The regular updates not only keep the customer’s interest in the games alive but also contribute significantly to the publisher’s and developer’s top-line growth.

So far, EA has always benefited from the launch of expansion packs and DLCs for most of its famous franchises. For instance, revenue from extra content and free-to-play shot up 34.0% year over year in the second quarter of 2013.

We believe that EA’s high-quality titles and a robust product pipeline along with the increasing online exposure and traction in the social and mobile gaming market will boost its top-line growth over the long term.

However, we remain cautious on EA due to its sluggish consumer spending, dismal video game sales and increasing competition from Activision (ATVI). Considering these factors, we have a Neutral recommendation on EA over the long term.

Currently, EA has a Zacks Rank #4 (Sell).

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