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Why Electronic Arts Shares Are Almost at an All-Time High

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EA’s recent game launches around the holiday shopping season will play crucial role in growth

In the prior part of this series, we saw that Electronic Arts (EA) has raised guidance for its current quarter as well as fiscal 2016 based on its game launches. EA continues to be the world’s top publisher on Sony (SNE) PlayStation and Microsoft (MSFT) Xbox consoles.

We also saw that EA’s sports titles—FIFA 16, NHL 16, and Madden NFL 16—have contributed greatly to the company’s growth. In its latest 2Q16 earnings release, EA stated that its annual sports franchises have a monthly average player increase of 30% on a YoY (year-over-year) basis for titles such as NHL 16, Madden NFL 16, and FIFA 16 together.

The Walt Disney Company (DIS) is releasing Star Wars: The Force Awakens in December 2015. The movie will again feature famous characters such as Princess Leia, Hans Solo, and Chewbacca.

The success of EA’s games Need for Speed: No Limits and Star Wars: Battlefront is very crucial to the company’s growth. As part of its multi-year licensing deal with Disney, EA is also expected to launch more Star Wars titles.

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Electronic Arts shares have risen more than 60% to date in 2015

Electronic Arts shareholders have benefited from the company’s performance through game launches and an increase in its guidance. EA shares have risen ~62% since the beginning of 2015, as the above share price graph shows. In comparison, Standard & Poor’s 500 Index has increased only 1.5%.

On October 29, 2015, EA shares hit $76.11 after the company announced its fiscal 2Q16 results. This was an increase of 96% in the last one year.

EA’s strategy has benefited its share price

EA’s strategy is a shift from a premium-price model on mobile to one that involves in-app and free-to-play purchases. The company’s strategic shift toward digital and mobile coupled with cost control has enabled the company to outperform market expectations. We can see the result in the company’s share price.

You can invest in the PowerShares QQQ Trust, Series 1 ETF (QQQ) to gain exposure to Electronic Arts. EA makes up about 0.35% of QQQ.

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