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Electronic Arts stock benefits from innovation and sound strategy


Mar. 14 2015, Updated 2:05 a.m. ET

Consoles and games that have played an integral role in EA’s success

With recent advancements in technology as well as the dynamic nature of the video game industry, new generations of consoles and games are always hitting the mobile, PC, and console markets. This innovation benefits EA, which is a leading name with a diversified portfolio of game titles. This trend has propelled EA’s (EA) stock to rise by more than 65% in 2014. According to Wallstreet.com, in the half year ended in fiscal 2015, EA managed to be the number-one publisher on both the Microsoft (MSFT) Xbox One and Sony (SNE) PlayStation 4 consoles in the Western world.

You can consider investing in the PowerShares QQQ Trust (QQQ) and the Technology Select SPDR (XLK) to gain exposure to Electronic Arts. EA makes up about 0.35% and 0.47% of these ETFs, respectively.

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Transition from consoles to digital revenues

Since 2013, Electronic Arts has aimed to transition from console games sold mostly at retail stores to generating the majority of its revenue from digital downloads. A multiyear agreement with the Walt Disney Company (DIS) in 2013 to create games for game consoles, computers, and mobile devices based on Star Wars characters was part of this strategy. As we’ll see in later parts of this series, owing to company’s strategic transition, the company has recorded strong digital revenue in 3Q15.


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