The question remains whether the NFL deal is enough to get customers to choose the Xbox One over the Playstation 4. The bigger question may be whether or not the new console can help Microsoft Corporation (NASDAQ:MSFT)’s revenue and profits. In fiscal 2012, Microsoft Corporation (NASDAQ:MSFT)’s entertainment and devices unit had sales of $9.6 billion. This represents only 13% of Microsoft’s revenue. The entertainment segment also has smaller profit margins than other business units, meaning less profit. The entertainment segment is expected to pass $10 billion in fiscal 2013 and could beat expectations if customers like exclusives like the NFL deal.
Electronic Arts Inc. (NASDAQ:EA)
In the fall of 2013, Electronic Arts Inc. (NASDAQ:EA) will release its newest video game in the Madden franchise. Named after legendary NFL coach John Madden, the game is one of only two sports franchises to top 99 million copies in sales. This year’s game will be extra special and will come with high expectations. The game line is celebrating the 25th anniversary with the appropriately named “Madden NFL 25.” This is a break away from the normal titles, which are named after the year they are released.
Expectations for the new Madden game are already extremely high. The game added back several features from previous versions of the game. Among them are “owner mode” and importing draft classes from “NCAA Football ‘14.” Online retailer Amazon.com was even offering customers free Sunday NFL Ticket packages with pre-orders of Madden NFL 25 Anniversary Edition.
Electronic Arts Inc. (NASDAQ:EA) needs a hit with the newest Madden game and it should get it. The company has seen the sports franchises of Madden, FIFA and NCAA Football carry the company forward. New game lines like Battlefield and a pending deal with The Walt Disney Company (NYSE:DIS)’s Star Wars unit should help, but sports is still where the cash is. Electronic Arts Inc. (NASDAQ:EA) announced it is not releasing games for the Nintendo WiiU, which means the Madden game needs to sell well on the Playstation 3 and Xbox 360.
Conclusion
Microsoft priced its new Xbox One console $100 higher than the Playstation 4. This move has many people already giving the race to Sony. However, if Microsoft can convince people of its true entertainment center rather than console use, sales could still be as huge as originally expected. Deals like the one with the NFL help the Xbox One be the center of the living room for video games and entertainment. Microsoft stock should see a nice boost going into the fall with the new console.
Verizon will continue to battle AT&T Inc. (NYSE:T) and others for telecom subscribers. Verizon has taken $1 billion and spent it wisely in a move that could eventually pay itself off. Even if Verizon loses money on the Verizon deal, it has attempted to differentiate itself and can hopefully pick up some subscribers along the way.
Electronic Arts is poised for a big year with the anniversary “Madden NFL 25” video game. New games from the Star Wars franchise and the upcoming 2014 World Cup will help the company post revenue gains and likely beat analysts’ targets.
The article Three Companies Profiting From the National Football League originally appeared on Fool.com.
Chris Katje has no position in any stocks mentioned. The Motley Fool owns shares of Microsoft. Chris is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
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