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The Zacks Analyst Blog Highlights: Microsoft, Sony Group, Activision Blizzard and Electronic Arts

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For Immediate Release

Chicago, IL – May 21, 2021 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Microsoft Corporation (MSFT - Free Report) , Sony Group Corporation (SONY - Free Report) , Activision Blizzard, Inc. and Electronic Arts Inc. (EA - Free Report) .

Here are highlights from Thursday’s Analyst Blog:

4 Stocks to Watch as Videogames Continue to Soar

While people continue to avoid outdoor entertainment spots like theme parks and movie theatres, the videogame industry has been making the most of the opportunity. The pandemic has seen people spending more time in their homes, helping indoor entertainment and videogames to score big.

The trend seems to have been continuing into this year too despite the Centers for Disease Control and Prevention (“CDC”) lifting and relaxing a number of COVID-related restrictions.

Videogame Spending Jumps in Q1

According to the NPD Group, spending on videogames jumped 30% in first-quarter 2021 on a year-over-year basis to reach $14.92 billion. Gamers spent across all gaming categories in the quarter. An 81% surge was seen in spending on hardware.

Spending on content increased 25% to reach $12.8 billion. Through the first 90 days of 2021, accessories sales grew 42% to $717 million from the year-earlier figure of $505 million.

The best-selling games in the first quarter were Among Us, Animal Crossing: New Horizons, Call of Duty: Black Ops Cold War, Super Mario 3D All-Stars and Super Mario 3D World.

Videogame Industry on a High

Videogames are the new-found love of Americans as they aren’t left with too many options for entertainment. Although the CDC is relaxing restrictions and the vaccination drive is in full swing, people are still hesitant about visiting crowded places like theme parks, movie theatres and other entertainment joints. This saw them spending more on videogames, hardware and accessories, thus making it a great 2020 for the industry.

According to an earlier report from NPD Group, videogame sales hit $56.9 billion in 2020 in the United States, jumping 27% from a year earlier. And now, 2021 is on a high.

According to Newzoo, global videogame revenues could reach $189.3 billion in 2021, taking the total number of gamers to 2.8 billion worldwide. And it seems that the industry is on track, with sales soaring in the first three months of the year.

Stocks to Watch

The videogame industry is seeing robust sales in2021 too, given that the pandemic is still keeping people indoors. Thisthus makes it an opportune time to invest in gaming stocks that are sure to benefit in the near term.

Microsoft is one of the leading videogame makers and manufacturers of hardware and accessories. The company has been expanding its footprint in the industry and recently announced that it will be acquiring videogame maker ZeniMax Media.

The company’s expected earnings growth rate for the current year is 35.4%. The Zacks Consensus Estimate for current-year earnings has improved 5.8% over the past 60 days. Microsoft carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Sony designs, manufactures and sells several consumer and industrial electronic equipment. The company’s product roster comprises audio and video equipment, televisions, displays, semiconductors, electronic components, gaming consoles, computers and computer peripherals, and telecommunication equipment. 

The company’s expected earnings growth rate for next year is 16.9%. The Zacks Consensus Estimate for current-year earnings has improved 1.2% over the past 60 days. Sony has a Zacks Rank #3.

Activision Blizzard is a leading developer and publisher of console, online and mobile games. The company’s Call of Duty is one of the most-popular gaming franchises globally. Its Overwatch League can be considered a pioneer of the e-sports concept.

The company’s expected earnings growth rate for the current year is 8.7%. The Zacks Consensus Estimate for current-year earnings has improved 2.7% over the past 60 days. Activision Blizzard carries a Zacks Rank #3.

Electronic Arts is a leading developer, marketer, publisher and distributor of interactive games (video game software and content). It distributes its gaming content and services through multiple distribution channels as well as directly to consumers (online and wirelessly) through its online portals.

The company’s expected earnings growth rate for next year is 6.6%. The Zacks Consensus Estimate for current-year earnings has improved 1% over the past 60 days. Electronic Arts has a Zacks Rank #3.

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.


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