3. Electronic Arts

FY08 Revenue: $3,665M, +19% (Rank: 4)
FY08 Profit/Loss: -$454M (Rank 18)
FY09 Revenue Expectations: $4,900M - $5,150M, +34% to +41%
Titles in Global Top 100: 23 (Rank: 1)
Units in Global Top 100: 39.5M (Rank: 1)
Review Average: 71% (Rank: 5)
 

Explanation of Ranking: Highest revenue of any third-party, but also one of the biggest losses for the year. Several expensive purchases dented its bottom line with another more expensive acquisition – for Take-Two Interactive – dragging out for several months.

With fifteen titles selling over 2 million copies each in the past year, EA is still the biggest publisher around. Regardless, its bright star is just a shade darker compared to the brilliance of Nintendo and, to a lesser extent, Activision. In the face of competition, a EA is pushing its advantage on several fronts where it has a powerful edge.

First, it can continue to rely on its established sports franchises (Madden, FIFA, and NCAA) as well as The Sims, which passed 100 million copies to date this year. With the Xbox 360 version of Madden taking top sales in 2007, look for continued growth in August when the 20^th Anniversary edition hits store shelves.

Second, EA has successfully promoted challengers to two of Activision's key franchises. The new skateboarding simulation, SKATE, has sold very well up against Activision's Tony Hawk's Project 8. Moreover, Rock Band has performed very well against Guitar Hero III, despite its significantly higher price. In a segment of the market with an established leader, EA and MTV and Harmonix should be quite pleased having sold over 2.5 million copies of Rock Band (in the U.S. market). Upon this base EA and its partners can hope to build the franchise when Rock Band 2 launches later in 2008.

Finally, EA has used its position of strength to buy the development houses BioWare Corp. and Pandemic Studios, adding ten franchises to its portfolio. Should its bid for Take-Two be successful, EA's already impressive breadth will expand further. As the months drag out, however, the benefit of such a merger moves further into the future.