Game on: its earnings time for EA, Activision

August 4, 2009

Video game publisher Electronic Arts will report first-quarter earnings after the bell today, amid Wall Street’s hopes of an industry comeback in the second half of the year. June video game sales in the U.S. were pretty dismal, but investors are probably betting on big-name game titles and possible game console price cuts to pump some life back into the slump in the second half of 2009.

Analysts say EA, the publisher of hit football game Madden NFL, likely had a strong June quarter, even though they are predicting a loss per share of 13 cents. Last week, UBS initiated coverage of EA and Activision with “buy” ratings. The firm expects the $39 billion industry to grow to $55 billion in 2012, and believes EA is a compelling turnaround story because of its re-energized game strategy.

Activision, which reports Wednesday, of course remains the industry darling, with an enviable stable of franchises, including Guitar Hero and Call of Duty, new installments of which will be released later in the year.

Will the video game publishers see a better second half?

Keep an eye on:

  • Twitter, a threat to football’s success. (The New York Times)
  • Time Warner could sell less-successful magazines and keep profitable ones. (Washington Post)
  • Spotify, tipped to be a potential iTunes challenger, secures funding. (Financial Times)

Photo: Tinlyn Jacobson plays EA’s Sports Active game for the Wii at E3/Reuters.

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