Electronic Arts Inc. (EA): A Casualty of a Changing Market

New Consoles

The video game industry is somewhat cyclical, so that it is out of favor of late isn’t surprising. A lack of new game consoles is partly to blame, since there’s nothing new and exciting to upgrade to and push new game sales. Time, however, recently published an article suggesting that game consoles are dead, pointing to the move toward digital downloading.

Sony Corporation (ADR) (NYSE:SNE), for example, is planning to launch a new version of its PlayStation game console later this year. The company has made it clear that the new device will make extensive use of the Internet for both game play and, importantly, for the delivery of content. For example, the console will be capable of allowing game play to take place before a game is fully downloaded.

Time’s contention, however, is that this is actually a step toward obsolescence since it means that game consoles could easily be absorbed by a more complex television. That’s a big risk for Sony, which is already struggling on the product front. Sony, for the most part, looks like a good company to avoid.

Not a big deal?

No matter what happens to game consoles, gamers aren’t going away. And, if there is demand, games will still need to be created. So, the game industry’s current malaise could be a good buying opportunity.

EA data by YCharts

Indeed, if Sony’s new console sparks sales and pushes Microsoft Corporation (NASDAQ:MSFT) to up its game, the game industry could see a bump. If televisions become game consoles, an additional round of buying might take place. This could be a good time to get aboard a changing industry with the industry’s biggest players. This includes Electronic Arts Inc. (NASDAQ:EA) and its aggressive efforts to change with the times.

The article A Casualty of a Changing Market originally appeared on Fool.com is written by Reuben Gregg Brewer.

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