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EA to Fight Activision With New Titles

NEW YORK ( TheStreet) -- As Electronic Arts (ERTS) prepares to report its first-quarter earnings Tuesday afternoon, investors will be looking to gain insight into two of the video game publisher's biggest titles ever, Battlefield 3 and Star Wars: The Old Republic, which are poised to take on entrenched games from rival Activision (ATVI - Get Report).

While these titles mark a departure from EA's recent, aggressive push into social, casual and mobile gaming -- including its $750 million acquisition of PopCap Games -- they're a significant part of the company's strategy to create fewer, bigger titles that incorporate digital components.

"The biggest elements that matter right now are Star Wars and Battlefield 3," said Eric Handler, an analyst with MKM Partners. "It's a matter of just waiting on execution."

The huge titles are also an opportunity for EA to grab market share from Activision.

Battlefield 3, a first-person shooting video game, is being positioned as a competitor to Activision's wildly popular Call of Duty franchise. Activision's most recent title in the series, Black Ops, generated more than $1 billion in sales only a month after its release, becoming the best-selling video game ever in the U.S. Its newest edition, Modern Warfare 3, will hit stores in November, several weeks after the release of EA's Battlefield 3.

"[<i>Battlefield 3</i>] is designed to take on [<i>Modern Warfare 3</i>,]," EA CEO John Riccitiello said in April at an industry conference. "If you're looking at a battle of the titans, like Red Sox vs. Yankees, or Google (GOOG) vs. Microsoft (MSFT), this is it."

EA is betting big on the success of Battlefield 3 -- it's already planning to spend $100 million on marketing campaigns for the game.

Big franchises like Call of Duty and Battlefield 3 are attractive to gamers because of their online, multi-player features. They also provide publishers with new revenue streams via the sale of expansion packs, or supplemental storylines and other related content.

Investors will be waiting for further insight into pre-order numbers for Battlefield 3. In May, the company said pre-orders for the game were up significantly from those its predecessor, Battlefield: Bad Company 2, saw in 2010.
Star Wars: The Old Republic is expected to be released this holiday season.

Another upcoming title EA investors want to know more about: Star Wars: The Old Republic, the company's upcoming massively multi-player online (MMO) game. EA announced late last week that pre-orders of the game are now available and it will be available during the holiday season, though it hasn't yet revealed an official release date or subscription fees.
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