April 14, 2024

Electronic Arts’ Decent Performance in 2022 Makes it an Attractive Target for Acquisition

Electronic Arts’ Decent Performance in 2022 Makes it an Attractive Target for Acquisition

Everyone knows that the stock markets have been performing very badly since the beginning of 2022. However, you have to forget about the overall stock market situation and focus on Electronic Arts (EA).

Electronic Arts’ Market Reputation

Among all the video gaming developing companies, you will find Electronic Arts to be the leader. It has been responsible for the development of hundreds of games and dozens of franchises for more than a couple of decades.

Surprisingly, Electronic Arts have been demonstrating a strong and decent performance ever since the beginning of 2022. Even the macroeconomic headwinds, fears of recession, and worries about inflation haven’t been able to impact the performance of Electronic Arts.

In terms of year-to-date performance, almost every tech company has experienced double-digit dips in their share prices. However, Electronic Arts have only experienced a 2% drop in share prices from the start of 2022 until now.

Even now, the entire tech sector is looking at a bearish trend. Still, Electronic Arts are demonstrating strong gains and its performance has been really well.

Gaming Industry Consolidation

Despite the remarkable performance of EA, the consolidation of the gaming industry is raising concerns about where EA is going to be in the future.

In case you’ve missed it, several big-time game developing companies have been acquired by some of the largest tech companies in the world. Activision Blizzard was reportedly acquired by Microsoft, the owner of XBOX.

Activision Blizzard is the company behind the development of many gaming franchises with huge followings. These franchises include Diablo, World of Warcraft, StarCraft, and Overwatch among others.

The next notable mention of a huge acquisition in the gaming sector was by Take-Two Interactive which was able to acquire Zynga. Take-Two Interactive is the company behind the development of the Grand Theft Auto franchise, while Zynga is a mobile game developer.

Future of Electronic Arts

As the major game developers are being acquired by companies that have an even larger influence over the gaming sector, people want to know the future of EA.

Investors and market observers want to know which direction EA is headed. They want to know whether EA is thinking about being taken over by a larger tech company or if it wants to stay independent.

EA is constantly facing strong competition not only from the PC or Console gaming sector. It is also feeling the pressure coming in from mobile game developers and from the metaverse gaming industry.

Companies such as Fortnite and Roblox are demonstrating strong competition to the major game developers. Even Netflix has entered the gaming industry as it wants to increase its revenue portfolio with the launch of a new sector.

While many market analysts are asking the same question, it is rumored that EA may be getting offers from four major tech companies. These companies include Amazon, Comcast, Disney, and Apple.

If the rumors are true, then no matter the company EA chooses to go with, it will definitely experience a rise in its share prices.

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