the highlight of the last year was the strong demand for consoles during the entire year that managed to overshadow the lagging software sales. In December, gamers spent $1.31 billion on hardware, down nearly 4% year-over-year (y-o-y). However, the trend continued in the software segment, as the net software sales for December 2014 reached $1.25 billion, down 2% year-over-year. Sustained demand for new consoles: Microsoft’s Xbox One and Sony’s PlayStation 4, as well as new core title releases in the last few months resulted in a fairly strong holiday quarter in 2014. As a result, for the entire calendar year of 2014, gamers spent roughly $5.1 billion on physical hardware for video games, up more than 18% y-o-y, offsetting software sales, which were nearly $5.3 billion, down 13% y-o-y. As a result, the total revenue for the industry in the U.S. was up 1% y-o-y in 2014. In the second quarter, the company delivered strong results, as it reported net non-GAAP revenues of $1.22 billion, up 17% year-over-year (y-o-y) and 7% above the given guidance.The company’s non-GAAP diluted EPS was $0.73, up 121% y-o-y. The impressive quarterly performance was greatly boosted by the 3 major titles: Madden NFL 15, FIFA 15 , and The Sims. Apart from these major titles, Battlefield 4, Titanfall, FIFA 14 , and Plants Vs Zombies Garden Warfare performed pretty well in their respective genres. In the second quarter, gamers played EA’s online modes for more than fut coins 1.9 billion hours on the console and PC. Our $39 price estimate for Electronic Arts’ stock is 20% below the current market price. See our complete analysis of Electronic Arts stock here FIFA 15 Madden NFL 15 Still Going Strong Over the last decade, EA’s dependence on its sports franchises, Madden NFL and FIFA, has increased manifold. Both titles are the most popular and most widely played sports games in their respective regions. Madden NFL is the best selling sports series in the United States, whereas FIFA is the highest grossing sports title in Europe. The company released new editions of both the core sports titles last year, and since then both titles have been performing pretty well. In the latest NPD report, Madden NFL 15 retained the 3 spot in the U.S., as the most widely sold title, whereas FIFA 15 just managed to grab the 10 spot. However, according to latest U.K. rankings by Gfk chart track, FIFA 15 was ranked 2 in the UK video game standings.The increase in sales of the sports titles will translate to better revenue growth this year, as this year’s edition costs slightly more than previous year editions due to the inclusion of ultimate team mode. With both the titles maintaining their dominance in the two biggest markets: U.S. and Europe, Electronic Arts in set to report revenue growth in the third quarter. Moreover, the title sales accelerate in the holiday quarter, with more gamers opting for core titles.
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