Kenneth Li

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Electronic Arts Gets a Boost From Sales of Sims Online

Kenneth Li

Video-game software giant Electronic Arts(ERTS Quote) shares got a boost Wednesday from upbeat comments about the company's Sims Online game.

Chief Financial Officer Warren Jenson told investors at a Morgan Stanley conference Tuesday that the game had sold 90,000 units within the first three weeks of its release. The closely watched game is the first online version of one of the hottest-selling games in video-game history.

Investors breathed a sigh of relief, pushing shares up $1.86, or 3.8%, to $50.79 in morning trading. The company's stock had fallen to a 52-week low on Tuesday, after an industry report said sales of Sims Online showed a weaker-than-expected launch.

Research firm NPD said a paltry 13,000 units were sold within the first week of the game's release, for the week ending Dec. 21. The early sales figures inspired a rash of negative research notes from Wall Street analysts. Soundview Technology Group games analyst Shawn Milne said EA's highly anticipated game was off to a "slower-than-expected" start, which "may continue to be an overhang on the stock if subscriber levels fall short of expectations."

Jensen's upbeat comments and updated sales figures helped bandage some of the wounds. Also, NPD is expected to release software sales figures for the gaming industry later Wednesday, for the week ending Dec. 28.

Moreover, early sales figures, which included sales for the one-week period ending Dec. 21, actually included only about two days of sales for the game. While the official shipment date of Sims Online was Dec. 17, the game didn't hit many store shelves until Dec. 20 and Dec. 21, according to a Soundview report.

"Although December retail sales fell short, we think EA was less impacted than its competitors and remains very well positioned for '03 and '04," said U.S. Bancorp Piper Jaffray games analyst Anthony Gikas, following Jensen's comments Tuesday.