Will 'Spore' help Electronic Arts' fortunes?


You know, I keep hearing about this Spore game. It's set to be released by Electronic Arts (NASDAQ: ERTS) to the Nintendo DS and to computer platforms later this week. There's been so much buzz surrounding it, and for good reason. Not only does it sound pretty neat and imaginative, but it was designed by Will Wright, the man who brought the world the Sim franchise. As I understand it, the player's goal is to guide a microbe through the process of evolution until it becomes a society blessed with enough intelligence so as to confer the capability of interstellar travel. Wild stuff, right? Remember, Wright is a genius, and the Sim games have certainly brought in a lot of dough for EA.

But how will the game be received? Is it too complex, too brainy for most gamers? Or, will Spore take the whole Sim concept into a new stratosphere of success? Are we witnessing the birth of a new, marketing-friendly super-franchise that will appeal to a broad demographic? Like I say, the buzz is strong. Yet, I didn't realize the title was coming out this week until I read this recent press release, which is using some celebrities to promote the game. Go figure, I guess.

I think Spore will be a hit, but I'm not sure it will be a big enough hit to move EA's stock back to its 52-week high, certainly. The publisher has such a deep portfolio of games, so this one title won't necessarily move the needle. But the celebration of Spore forced me to take another look at EA and wonder if the company's stock might be an interesting play ahead of the holiday season.

The problem I have, of course, is that I already own Activision Blizzard (NASDAQ: ATVI). Even after that stock's run-up, I still see more upside potential. Sometimes EA looks like a tempting way to play the video-game business from a fresh perspective. I could sell my Activision and then reinvest the profits in EA, a stock that could be poised to head higher from here. One certainly couldn't say that it's already had a run, after all since its down more than 16% year to date.

In the end, I don't think I could do it. EA really does have a good holiday ahead of it. Not only should Spore do decent numbers, but Rock Band 2, which EA distributes for Viacom (NYSE: VIA), should also be successful. Thing is, though, that Activision Blizzard may have an even better holiday ahead of it. The new Guitar Hero game should sell like crazy, and if you want to be looking seriously at any video-game stock, that just might be the one.

So, I salute this new Spore program. It really does sound like a lot of fun. And it should be a hit. It isn't, however, enough of a catalyst to bring me out of Activision Blizzard's shares and into EA's.

Disclosure: I own Activision Blizzard; positions can change at any time.

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Last updated: February 10, 2012: 10:32 AM

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