Sports Games Still Key for Electronic Arts

Electronic Arts (NASDAQ: ERTS ) built an empire on the strength of its licensed
professional sports video games Madden NFL , FIFA , even the hard-on-its-luck
Tiger Woods PGA games made that company a titan. However, the reality is EA's
shares now trade at about one-third their level from late 2008. But don't
blame the sports game licenses, which are a must to lead EA's stock back to
its glory-days levels. The company recently reunited with Major League Baseball,
a license it lost to Take-Two (NASDAQ: TTWO ) back in 2005, and their first
release together holds the key to a stock revival. But it's not a traditional
video game, it's a Facebook time-waster called World Series Superstars . The
odds are good it will be a hit. The game debuted on Facebook on Thursday to
coincide with baseball's Opening Day, and it has all of the hallmarks of a
social-game addiction waiting to happen. As with Zyngas infamous Farmville ,
World Series Superstars is all about exploiting obsessive cultivation habits (in
this case managing a team) while competing and communicating with Facebook
friends. Its free to play, thanks to the in-game advertising that will provide
EA, Facebook, and MLB with a steady stream of revenue, not to mention access to
precious game-player data. As All Things Digitals Tricia Duryee noted on
Wednesday, World Series Superstars , as well as EA's other pro sports licensed
titles on Facebook, including Sports PGA Golf Challenge , FIFA Superstars , and
Madden Superstars , all demonstrate the vital importance of branded game content
on Facebook. Social and mobile game developers have already helped the
entertainment and sports industries make the shift from releasing more expensive
licensed gaming products on home consoles like Microsofts (NASDAQ: MSFT ) Xbox
and Sonys (NYSE: SNE ) Playstation 3 to platforms like Facebook that offer
players access through multiple outlets (i.e. phones, PCs, etc.) Social games
will be more than just important to EAs business model going forward they will
be the foundation of the companys business in a few years time, provided the
industry continues to grow the way it has. EA put a great deal of money into
developing original intellectual properties for home consoles and PCs starting
in 2007, and while that effort produced a number of critical successes,
underperforming original titles and the high cost of console game development
saw the company eclipsed by Activision Blizzard (NASDAQ: ATVI ) and Ubisoft as
the publisher to beat. In other words, the economic crash of 2008 wasnt the only
thing that led to EA's shares plummeting to its current range. Bringing EA's
sports game legacy to mobile and social platforms will go a long way towards
rehabilitating that stock, and World Series Superstars is a start. As of this
writing, Anthony John Agnello did not own a position in any of the stocks named
here. Follow him on Twitter at  @ajohnagnello  and  become a fan of 
InvestorPlace on Facebook.