Gaming Outlook: Multi-Player Online, Used Games Gain in Popularity

The video game segment is a particularly interesting one. It's undergoing a massive shift as single-player games fall out of favor to be replaced multi-player or sharing games or, alternatively, massively multiplayer online (MMO) games. Nintendo (NTDOY.PK) has been cleaning everyone's clocks with its simple yet highly addictive Wii games (SuperMario Karts is particularly addictve.) And Activision Blizzard (ATVI), which owns and operates the wildly popular "World of Warcraft" MM franchise, has enjoyed considerable buzz.

At the same time, GameStop (GME) has been doing very well and bucking the recession primarily due to sales of used games through the stores. This is a much higher margin item than the new games. The sales of used games has greatly angered the video game publishers like Electronic Arts (ERTS) and TakeTwo Interactive (TTWO).

The Piqqem Sentiment appears to be closely tracking these trends, as Piqqem users have given a single-arrow up rating to Activision and to GameStop but a single arrow down to the publishing giant Electronic Arts, which has no strong play in the MMO market. They also dislike TakeTwo and THQ (THQI), among others.

The upshot? From Piqqem Sentiment, we think that the publishers still reliant on revenues from single-player games and games relying primarily on XBox and PS2 and PS3 will continue to struggle, barring huge changes in MMO offerings and particularly strong lineup changes on the order of a Grand Theft Auto-type franchise title.

Comments

[Alex Salkever:]

I think you are looking backwards and not forwards. Look at China, where MMO is driving the market. In general, Asia tech has floated over here eventually. Korea was way ahead of U.S. with WiBRO, Asia ahead with 3G data and use of mobile devices. MMO is the natural extension of ongoing trends in the sector around dispersed relationships and online friendships. With Nintendo, you miss the point. I admit it's the Wii that's driving that growth, not MMO. But what made Nintendo grow so well is it is a team play that has mainstream appeal. The rest of the pack is confined mainly to gamers, which, face it, runs out of cash after only so long when games cost $50 a pop.


On Feb 12 03:09 PM speculawyer wrote:

> The more I think about it, the more I realize how wrong you are with
> MMOs. EA tried MMOs with the Sims and a racing game . . . both failed.
> And there is no big console MMO at all . . . a star wars MMO from
> Bioware may do the trick through . . .or not.

Feb 13 03:08 AM

[TwoFingerPoi:]

My youngest son, 12 years old, is a big fan of WoW but spends as much time with the Nexon game, Mabinogi, which has a great business model in which the core MMO game is free with microtransactions for game enhancements. I am constantly being hounded for Nexon game cards from 7-11.

Feb 13 10:36 AM