Video game stocks get bounce with console transition
A screen shot from the video game 'Call of Duty: Ghosts,' developed by Infinity Ward for Activision.(Photo: Activision/Infinity Ward)
Top video game publishers seem to be weathering the potentially troublesome transition to new home console game systems.
Pre-market trading was trending up Wednesday on each of the top three publicly-traded U.S. game publishers: Activision Blizzard (up about 2%), Electronic Arts (3%) and Take-Two Interactive (0.7%).
All three have seen their stock prices rally since last Thursday's release of November's top video game sales from The NPD Group[1]. From market close on Thursday, Activision has risen from $16.66 to $17.06 Tuesday; EA from $20.97 to $22.75 and Take-Two from $16.42 to $17.48.
The top-selling games in November were Activision's Call of Duty: Ghosts, EA's Battlefield 4 and Ubisoft's Assassin's Creed IV: Black Flag. All three of those games are available on the PlayStation 3 and Xbox 360, as well as Sony's new PlayStation 4 and Microsoft's Xbox One, both of which hit the market last month. Take-Two's GTAV was No. 5 for the month.
Console makers have seen shipments of their new systems sell out as fast as stores get them -- each has sold more than 2 million systems. But Microsoft and Sony stock have not gotten the recent lift that third-party publishers have.
Gamer confusion on which platform to buy – or fewer dollars to spend on games because they were investing in new game systems – was expected to have some effect on sales of annual game releases compared to 2012 sales. But overall retail sales of $2.74 billion in November were up 7% from the same time last year.
Cowen & Co.[2] analyst Doug Creutz stated in a note released after NPD's monthly report that "EA is likely in fine shape with (its soccer game) FIFA and Battlefield looking in-line or a bit better than guidance, depending on bundled and digital sales, and (football game) Madden likely only slightly below. However, we think Call of Duty is probably doing a bit worse than (Activision) expected, though the strong performance of (digital toy-game hybrid) Skylanders thus far may prove an offset."
And Call of Duty: Ghosts, Grand Theft Auto V (published by Take-Two) and Battlefield 4 are the three most-wanted titles on holiday wish lists, Nielsen[3] recently reported.
"EA and Take-Two are ... both going to benefit, as their respective sports and action games get reboots on new systems," The Motley Fool's Jason Ditz noted[4], adding that Activision Blizzard's PC clout will "allow them to take risks the others may not be able to afford."
References
- ^ http://www.usatoday.com/story/tech/gaming/2013/12/12/ps4-xbox-one-video-game-sales/4004209/ (www.usatoday.com)
- ^ http://www.cowen.com/ (www.cowen.com)
- ^ http://www.nielsen.com/us/en/newswire/2013/tops-of-2013-entertainment.html (www.nielsen.com)
- ^ http://www.fool.com/investing/general/2013/12/16/investing-in-the-next-generation-of-video-game-con.aspx (www.fool.com)