Electronic Arts Inc. (NASDAQ:EA) better hope that the launch of Madden 25 is a lot like the NFL season’s debut last night, with a bumpy start capped off with a flurry of scoring.
Shares of the country’s second-largest video game company slipped after announcing that it sold more than a million copies of the game during its first week on the market. That may not seem so bad, but Electronic Arts Inc. (NASDAQ:EA) was bragging about selling more than 1.65 million copies during the first seven days last year.
Yes, that’s pretty bad.
It was actually easy to see this coming. Forget the fact that console and software sales, in general, have been falling for the past four years. That hasn’t slowed marquee franchises, and Electronic Arts Inc. (NASDAQ:EA) saw an 8% spike in first-week sales last year for Madden 13.
The real problem here is November’s arrival of the PS4 and Xbox One. They’re not cheap, so gamers are saving up for the systems. They are also based on new chip architecture, making them organically incompatible with older games. If gridiron fans had a season to sit out, this one would be it.
This is naturally also bad news for GameStop Corp. (NYSE:GME). The leading video game retailer saw its shares move lower after initially opening higher.
GameStop Corp. (NYSE:GME) was expecting big things for this quarter, targeting an 11% to 15% spike in comps after posting nine straight periods of declining comparable-store sales. It remains to be seen how Madden 25‘s slow start will factor into that guidance.
It will also be interesting to see if the weakness carries over to this month’s biggest release: Take-Two Interactive Software, Inc. (NASDAQ:TTWO)‘s Grand Theft Auto V. This is the game that ultimately inspired GameStop Corp. (NYSE:GME) to forecast a turnaround at the store level; but what if the same trends that are eating at Madden 25 begin feasting here?
Investors aren’t taking chances. Take-Two Interactive Software, Inc. (NASDAQ:TTWO) joined GameStop Corp. (NYSE:GME) and Electronic Arts Inc. (NASDAQ:EA) in selling off a few minutes into the trading day.
This could be an opportunity for potential Take-Two Interactive Software, Inc. (NASDAQ:TTWO) investors, since Grand Theft Auto V is likely to hold up far better than Electronic Arts Inc. (NASDAQ:EA)’s football game. It will naturally have a longer shelf life than the Madden franchise, which loses its appeal as the actual NFL season wears on.
Peyton Manning wound up heaving a record seven touchdown passes last night. EA better hope that it can light up the scoreboard, too.
The article Maybe We’re Not Mad About Madden originally appeared on Fool.com and is written by Rick Munarriz.
Longtime Fool contributor Rick Munarriz has no position in any stocks mentioned. The Motley Fool recommends Take-Two Interactive . The Motley Fool owns shares of GameStop.
Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.
