Electronic Arts, Inc. (ERTS)

rtathletics (42.50) Submitted: 8/02/07 12:46 PM : Start Price: $51.48 ERTS Score: -24.25

With the release of three new and drastically different systems within the past year and a half, expect to see limited profitability from video game makers, as the front end R&D costs hit the bottom line before the sales revenue returns are generated. Once the platforms and accompanying new games have matured a little, expect to see that boost as the discounted future cash flows come to fruition. I commend ERTS for partnering with Microsoft to sell advertising within video games; this is an relatively new, unexplored revenue stream that I think has a lot of potential.

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