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Videogame Stock Roundup: Nintendo Super Mario Run to Release Next Month, NetEase Declares $1B Buyback

NTES NTDOY GLUU EA

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Last week, Nintendo (NTDOY - Free Report) announced the release of Super Mario Run on Dec 15, 2016. NetEase (NTES - Free Report) announced a $1 billion buyback authorization close on the heels of launching its first VR game on Google’s daydream platform.

Recap of the Developments

1. Japanese video games publishing giant, Nintendo has announced that it will be releasing Super Mario Run on Dec 15, 2016 for $9.99 across 151 countries. Per media reports, players will be able to play some of the levels for free but to play the whole game, in-app purchases are required. On Sep 7, 2016, at Apple’s Keynote address, Nintendo inventor Shigeru Miyamoto joined Apple CEO Tim Cook and announced the launch of Super Mario Run, the first Mario game on iOS platform.

The year has been a good one so far for Nintendo, which is basking in the success of Pokémon Go. Shares of this Zacks Rank #2 (Buy) stock are up over 74% year to date. Though the success of the game doesn’t directly benefit Nintendo’s financials, we believe that it has strengthened the Japanese video game publisher’s position in the lucrative mobile games space.

Nintendo had so far remained aloof from mobile games. It finally warmed to the idea of mobile games last year and struck a deal with DeNA to bring five mobile games by Mar 2017.

The company is also gearing up for the launch of Switch, its new videogame console which combines the functionalities of both conventional consoles and handheld devices. It will be available from Mar 2017 but the company refrained from providing details on the price tag. A revamped NES version with 30 in built games was launched a few days back. NES Classic is proving to be another success for Nintendo, if we go by the initial media reports.

2. NetEase has announced a new $1 billion buyback program for its ADRs over a one year time frame. The development comes close on the heels of NetEase launching its first VR game, Twilight Pioneers on Google’s VR platform, Daydream. With AR/VR fast emerging as viable business avenues, most video game publishers are exploring the opportunity.  

Electronic Arts (EA - Free Report) will be releasing two VR games this holiday season, Star Wars Battlefront Rogue One: X-wing VR Mission for PlayStation VR and Need for Speed: No Limits for Google’s Daydream platform. NetEase carries a Zacks Rank#3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

3. Glu Mobile (GLUU - Free Report) has launched Design Home, a new game from Crowdstar. Glu Mobile recently acquired majority stake in Crowdstar. Per Glu Mobile, Design Home “brings the best of the design world to your fingertips through interactive daily design challenges.” Per Investopedia, Design Home can strengthen Glu Mobile’s reach worldwide by connecting with interior designers and renovation specialists. The report also added that it has the potential to attract more mobile game players. Glu also carries a Zacks Rank#3.

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

-4.22%

4.77%

EA

-0.75%

5.97%

GLUU

17.49%

-8.90%

MSFT

3.29%

20.06%

NTES

-2.71%

44.86%

TTWO

0.68%

35.08%

ZNGA

2.56%

6.87%

 

 

 

 

 

 

 

 

 

 

 

 

 

Over the last five trading sessions, NetEase was down 2.71% while Glu Mobile was up 17.49%.

Over the last six-month period, NetEase surged the most (44.86%). Recently, NetEase reported solid third-quarter 2016 results. The increasing popularity of mobile-based games and the strength of PC games (licensed & self-developed) continue to keep investors interested in the stock. Moreover, growing mobile advertising revenues were an added incentive.

Glu Mobile was down 8.90% over the same time frame due to the underperformance of most of its releases. Its weak third-quarter results were somehow overshadowed by the announcement of a new CEO and acquisition of a majority stake in CrowdStar. 

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