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Videogame Stock Roundup: Key Takeaways from E3; ATVI's Skylanders to be Streamed on Netflix
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Last week, the video game industry’s mega trade show E3 grabbed the limelight. Apart from E3, another big story this past week was that of Activision Blizzard studio’s first production, Skylanders Academy debuting on video streaming service Netflix (NFLX - Free Report) .
1. Hosted by Entertainment Software Association (ESA), E3 is an annual video game industry trade show. The event kicked off on Jun 14 at the Los Angeles Convention Center and concluded on Jun 16. This year’s E3 in many ways was different. Big publishers like Electronic Arts (EA - Free Report) and Activision Blizzard pulled out of the show. EA went a step ahead and launched its own event EA Play just across the L.A convention center from Jun 12 to Jun 14.
However, EA held a press conference at the Expo and Battlefield 1 was one of the most talked about games at the Expo. Activision, though it did not launch a standalone event, showcased its new game Call of Duty: Infinite Warfare at the Expo.
It seems that Sony had the most successful run at E3 this year. Sony came up with an impressive line-up for PS4 including Days Gone, Spider-Man, LEGO Star Wars: The Force Awakens, God of War, Death Stranding, Final Fantasy XV and Resident Evil 7: Biohazard. Three of Sony’s games, namely, God of War, Spider-Man and Days Gone were out-and-out crowd-pullers. Sony also announced a 4K and VR game capable PS4 upgrade called NEO and announced a series of VR games for its upcoming PSVR headset in October. Sony has also priced its VR headset at $399, way below Facebook’s hefty priced $599 Oculus Rift headset. Moreover, Sony’s PS VR headset is compatible with all PS4 consoles while Rift needs a high configuration PC to work with.
Soon after Sony announced that its next game console PS4 would be far more powerful, Microsoft (MSFT - Free Report) announced a slimmer Xbox version called Xbox S and also teased the audience about Project Scorpio, its VR gaming device supporting 4K experiences to be released in time for the 2017 holiday season. It will have 8 CPU cores, 6 teraflops of GPU power and “will be the most powerful console every built”, according to Phil Spencer, the head of Microsoft’s Xbox gaming division. Microsoft also announced a number of games including We Happy Few, Forza 3 and Dead Rising 4.
Nintendo’s game Legend Of Zelda: Breath of the Wild was one of the most well received games at the expo. However, Take Two Interactive (TTWO - Free Report) was disappointing at E3 without any notable titles except for Mafia 3.
2. Activision has partnered with video streaming giant Netflix to debut its first TV show (animated series), Skylanders Academy in 2016. Skylanders is based on the video game of the same name. Activision is aiming to become a broad based entertainment company. As a part of the strategy, the company, last year, had formed its own studio to produce movies and TV shows based on its huge IP content. Skylanders Academy is its first show that will air exclusively on Netflix. Activision recently launched its first movie Warcraft based on its super hit video franchise World of Warcraft. However, the movie despite terrible reviews and bad show at the domestic box office managed to mint good money in the overseas territories especially China.
Performance
The following table shows the price movement of the major video game companies over both the past five trading days as well as the last six months:
Company
Last 5 Days
Last 6 Months
ATVI
2.44%
0.57%
EA
0.04%
9.18%
GLUU
5.31%
-19.32%
MSFT
-2.74%
-7.50%
NTES
1.83%
-9.28%
TTWO
-3.23%
8.69%
ZNGA
-3.02%
-2.65%
Over the last five trading sessions, Glu Mobile was up 5.31% while Take Two Interactive was down 3.23%.
Over the last 6-month period, Electronic Arts surged the most — nearly 9.18%. Increasing digital revenues and continued strength in Star Wars Battlefront sales were the primary catalysts. The company sold 14 million units of Battlefront in the last fiscal year. Going ahead, we believe that a strong pipeline of new releases, which includes a brand new Battlefield and Titanfall game along with Mirror’s Edge Catalyst will fuel top-line growth.
However, Glu Mobile was down 19.32% over the same time frame due to underperformance of most of its releases. But strong first quarter results, share repurchase authorization and its new Britney Spears and Taylor Swift game should make investors happy.
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Videogame Stock Roundup: Key Takeaways from E3; ATVI's Skylanders to be Streamed on Netflix
Last week, the video game industry’s mega trade show E3 grabbed the limelight. Apart from E3, another big story this past week was that of Activision Blizzard studio’s first production, Skylanders Academy debuting on video streaming service Netflix (NFLX - Free Report) .
1. Hosted by Entertainment Software Association (ESA), E3 is an annual video game industry trade show. The event kicked off on Jun 14 at the Los Angeles Convention Center and concluded on Jun 16. This year’s E3 in many ways was different. Big publishers like Electronic Arts (EA - Free Report) and Activision Blizzard pulled out of the show. EA went a step ahead and launched its own event EA Play just across the L.A convention center from Jun 12 to Jun 14.
However, EA held a press conference at the Expo and Battlefield 1 was one of the most talked about games at the Expo. Activision, though it did not launch a standalone event, showcased its new game Call of Duty: Infinite Warfare at the Expo.
It seems that Sony had the most successful run at E3 this year. Sony came up with an impressive line-up for PS4 including Days Gone, Spider-Man, LEGO Star Wars: The Force Awakens, God of War, Death Stranding, Final Fantasy XV and Resident Evil 7: Biohazard. Three of Sony’s games, namely, God of War, Spider-Man and Days Gone were out-and-out crowd-pullers. Sony also announced a 4K and VR game capable PS4 upgrade called NEO and announced a series of VR games for its upcoming PSVR headset in October. Sony has also priced its VR headset at $399, way below Facebook’s hefty priced $599 Oculus Rift headset. Moreover, Sony’s PS VR headset is compatible with all PS4 consoles while Rift needs a high configuration PC to work with.
Soon after Sony announced that its next game console PS4 would be far more powerful, Microsoft (MSFT - Free Report) announced a slimmer Xbox version called Xbox S and also teased the audience about Project Scorpio, its VR gaming device supporting 4K experiences to be released in time for the 2017 holiday season. It will have 8 CPU cores, 6 teraflops of GPU power and “will be the most powerful console every built”, according to Phil Spencer, the head of Microsoft’s Xbox gaming division. Microsoft also announced a number of games including We Happy Few, Forza 3 and Dead Rising 4.
Nintendo’s game Legend Of Zelda: Breath of the Wild was one of the most well received games at the expo. However, Take Two Interactive (TTWO - Free Report) was disappointing at E3 without any notable titles except for Mafia 3.
2. Activision has partnered with video streaming giant Netflix to debut its first TV show (animated series), Skylanders Academy in 2016. Skylanders is based on the video game of the same name. Activision is aiming to become a broad based entertainment company. As a part of the strategy, the company, last year, had formed its own studio to produce movies and TV shows based on its huge IP content. Skylanders Academy is its first show that will air exclusively on Netflix. Activision recently launched its first movie Warcraft based on its super hit video franchise World of Warcraft. However, the movie despite terrible reviews and bad show at the domestic box office managed to mint good money in the overseas territories especially China.
Performance
The following table shows the price movement of the major video game companies over both the past five trading days as well as the last six months:
Company
Last 5 Days
Last 6 Months
ATVI
2.44%
0.57%
EA
0.04%
9.18%
GLUU
5.31%
-19.32%
MSFT
-2.74%
-7.50%
NTES
1.83%
-9.28%
TTWO
-3.23%
8.69%
ZNGA
-3.02%
-2.65%
Over the last five trading sessions, Glu Mobile was up 5.31% while Take Two Interactive was down 3.23%.
Over the last 6-month period, Electronic Arts surged the most — nearly 9.18%. Increasing digital revenues and continued strength in Star Wars Battlefront sales were the primary catalysts. The company sold 14 million units of Battlefront in the last fiscal year. Going ahead, we believe that a strong pipeline of new releases, which includes a brand new Battlefield and Titanfall game along with Mirror’s Edge Catalyst will fuel top-line growth.
However, Glu Mobile was down 19.32% over the same time frame due to underperformance of most of its releases. But strong first quarter results, share repurchase authorization and its new Britney Spears and Taylor Swift game should make investors happy.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>