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Earnings Preview: Electronic Arts

CNN Money Reports: "Video game publisher Electronic Arts Inc. reports earnings for its fiscal first quarter, which ended June 30, on Tuesday. The following is a summary of key developments and analyst opinion related to the period.

OVERVIEW: EA is expected to report a net loss for the quarter, which is typical considering video game publishers have traditionally made most of their money during the holiday season when people buy the games as gifts. This, however, is slowly starting to shift as games are becoming a mainstream form of entertainment people enjoy year-round.

Despite the choppy economy, the video game industry has remained strong this year, with retail sales tracking at historic highs. Part of this can be attributed to the genre's widening audience, as well as the fact that it's a relatively cheap form of entertainment, compared with travel, for example.

After posting its fourth-quarter results in May, EA said that going forward, it will only provide guidance for the full year, updated each quarter. Analysts, such as Wedbush Morgan's Michael Pachter, think that withholding quarterly guidance will create volatility in EA's share price."

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