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Can Electronic Arts capitalize on the Wii Fit craze?

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Electronic Arts (NASDAQ: ERTS) hasn't been doing as well as its colleague Activision Blizzard (NASDAQ: ATVI). Indeed, when it comes to the numbers, Activision, which is responsible for franchise hits Guitar Hero and Call of Duty, has its competitor beat.

But EA recently released an exercise system for the Nintendo (OTC: NTDOY) Wii that was highlighted at CNBC.com. The piece mentions the enormous marketing presence that is supporting EA Sports Active. You get a couple accessories with the software: a leg strap that is used like a controller to interact with the screen, and a resistance band to increase the effectiveness of the workout. Oprah Winfrey's trainer apparently assisted EA with the design.

I've seen the marketing presence for EA Sports Active in retail myself, and I do appreciate what EA is trying to do. Simply put, the Wii Fit -- as well as the Wii all by itself -- has popularized the convergence of movement and video games. Consumers have welcomed the opportunity to go beyond blasting aliens and zombies into bloody bits of pixelated pulp.

Granted, most of these consumers were probably casual in nature when it came to playing games, but I know a hardcore gamer who also welcomes the diversion of the Wii Fit. Hey, you can't always be in the mood to play Resident Evil, right? Unless you're playing Resident Evil 4, of course, which is like one of the greatest games ever created!

But getting back to EA and its new software, I have to say that I definitely would not buy the stock based on the product. I think it's going to be a hit, but I doubt it's going to kill the supremacy of the Wii Fit. And EA has a lot of issues in terms of its pipeline quality that must be dealt with, making EA Sports Active just another potential piece of the puzzle. It won't represent all the pieces, to be sure.

Nevertheless, EA's management was smart to go after the exercise-gaming crowd. The hope is that this sector will increase in popularity, and that the publisher will be able to secure its own fad product. It's probably a long shot, but we'll have to wait and see how the public reacts to the system. Besides coming up with great, innovative titles, EA has a more pressing concern: controlling development costs. Every publisher is contending with this problem. Coming up with an exercise solution might make money in the short-term; coming up with a solution that will allow publishers to spend less and get more in return will definitely make money in the long-term.

Disclosure: I own Activision Blizzard; positions can change without notice.

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Last updated: November 08, 2009: 08:16 PM

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