Investment Rating - The report maintains a "Buy" rating for Electronic Arts (EA) with a target price of $179.80 [1][11]. Core Insights - EA reported FY26Q1 net revenue of $1.67 billion, exceeding consensus expectations by 7.4% and showing a year-over-year increase of 0.7%. Net bookings reached $1.3 billion, surpassing expectations by 4% and reflecting a year-over-year growth of 2.9% [1]. - The growth is primarily driven by the strong performance of core products, particularly the global football and rugby series, while the decline in "Apex Legends" was less severe than anticipated. Despite increased investment in new game releases leading to a 4.9 percentage point drop in net profit margin to 12%, the company achieved a net profit of $201 million, exceeding expectations by 51.6% [1]. - EA plans to release "Battlefield 6" within FY26 and maintains its full-year guidance unchanged [1]. Summary by Sections Financial Performance - FY26Q1 net bookings were $1.3 billion, higher than the previous guidance of $1.23 billion. Game net bookings were $214 million, up 27.4% year-over-year, driven by the new title "Split Fiction" [1]. - Real-time service net bookings were $1.08 billion, down 0.9% year-over-year, impacted by the performance of "FC" and the rugby series, partially offset by the better-than-expected decline in "Apex Legends" [1]. - Key game series performance: 1. "FC" series net bookings showed single-digit growth year-over-year, with "FC Online" achieving double-digit growth and "FC Mobile" surpassing 50 million installations. 2. Rugby series net bookings maintained positive growth year-over-year, although a decline of 8% is expected in Q2 due to high base effects, with a recovery anticipated in H2. 3. "F1 25" launched in Q1, benefiting from the concurrent F1 movie release, resulting in a 27% year-over-year increase in net bookings [1]. Earnings Forecast and Valuation - The report slightly lowers FY26-28E net revenue estimates by 1%, 0.8%, and 0.8% to $7.19 billion, $8.11 billion, and $8.36 billion, respectively, primarily due to pressure on net bookings from the rugby series [3]. - FY26-28E net profit estimates are also reduced by 4.7%, 2.3%, and 2.6% to $911 million, $1.38 billion, and $1.43 billion, respectively, due to rising promotional costs for "Battlefield 6" [3]. - The valuation is switched to FY27, assigning a PE of 33x, consistent with peer averages, leading to a target price of $179.80, down from a previous estimate of $184.60 [3][11]. Upcoming Releases - The first trailer for "Battlefield 6" was released on July 24, with over 7 million views by July 29. The game is expected to launch within FY26 on PS5, Xbox XJS, and PC, with the highest historical investment in its development [2]. - The core football game "FC 26" is set to release on September 26 across all platforms, including Switch 2, focusing on enhancing player experience with competitive and realistic gameplay modes [2].

Core Viewpoint - The article discusses the mixed reception of the newly released FPS game "界外狂潮" (Outsider), highlighting its innovative card gameplay and unique art style, while also addressing concerns about its appeal to traditional FPS players and its overall market positioning [2][11][18]. Group 1: Game Performance and Reception - "界外狂潮" achieved impressive initial performance with a peak online player count exceeding 110,000 shortly after its release on Steam, maintaining around 90,000 active players [2][3]. - The game has received a "mostly positive" rating on Steam, indicating a favorable reception among players [2][3]. - Analysts predict that "界外狂潮" will contribute approximately 1.8 billion RMB in revenue to NetEase this year, despite delays in its overseas console launch [3][18]. Group 2: Gameplay Mechanics and Design - The game incorporates a unique card system that allows players to draw from over 150 cards during matches, altering the rules and adding unpredictability to gameplay [2][5]. - Critics note that while the card mechanics introduce novelty, they may compromise the fairness of the game, potentially affecting player retention if performance metrics decline in the coming months [8][9]. - The game features a longer time-to-kill (TTK), which may appeal to casual players but could detract from its competitive nature [9][12]. Group 3: Market Trends and Future Outlook - The resurgence of interest in PC gaming, particularly in the FPS genre, is highlighted, with a noted shift from mobile to PC games as developers seek to capture a dedicated player base [18][20]. - The FPS market is projected to grow significantly, with estimates suggesting it will reach approximately $47.34 billion by 2032, reflecting a compound annual growth rate (CAGR) of about 5.60% from 2024 to 2032 [20]. - Industry experts emphasize the importance of continuous innovation in the FPS sector, as major companies like Tencent and NetEase strive to differentiate their offerings in a competitive landscape [21].