Square Enix: The Winner Of E3 2013

Jun.13.13 | About: Square Enix (SQNXF)

In case you are unaware, the E3 is happening in Los Angeles this week. The Electronic Entertainment Expo has been held every year since 1995. The event is the video game companies' attempt to show off the latest games and technologies. The week-long event can have a huge impact on publicity and anticipation for upcoming releases, and likewise can also impact the share price of publicly traded companies.

The 2013 Electronic Entertainment Expo was seen as the match between Sony (NYSE:SNE) and Microsoft (NASDAQ:MSFT) in a match-up of new gaming consoles. Both gaming companies squared off talking about price, release dates, and exclusive games available for their consoles. By now, you have heard the arguments of which console will sell more and how those two companies will trade for the rest of the year.

The big winner in my mind from the 2013 E3 is Square Enix (OTCPK:SQNXF). Square Enix is a video game maker with major blockbuster franchises like:

  • Final Fantasy
  • Tomb Raider
  • Dragon Quest
  • Kingdom Hearts
  • SaGa
  • Mana
  • Space Invaders
  • Chrono

Prior to the E3 conference, Square Enix put out a press release of games it would discuss at the event. Here is a look at the games that were highlighted at the E3:

  • "Final Fantasy XIV A Realm Reborn"- MMORPG for Playstation 3 and PC, coming in August 2013
  • "Thief"-Playstation 4 and XBOX One, coming in 2014
  • "Murdered: Soul Suspect"-XBOX360, Playstation 3, coming in 2014
  • "Deus Ex: The Fall"-WiiU, coming late 2013
  • "Lightning Returns: Final Fantasy XIII"-XBOX 360, Playstation 3, coming February 2014
  • "Kingdom Hearts 1.5 Remix"-Playstation 3, coming September 2013

Square Enix held nothing back at the 2013 E3. Along with the prior announced games, the company showed off two upcoming highly anticipated blockbusters. Square Enix said both "Kingdom Hearts III" and "Final Fantasy XV" will be hitting consoles within the next year.

The Final Fantasy brand is huge in video games. Throughout its history, the franchise has sold over 100 million copies around the world. That number includes 31.5 million copies in North America. The Kingdom Hearts series has sold almost 20 million copies around the world. Kingdom Hearts is a joint venture with Disney (NYSE:DIS). The video game has classic Disney characters like Mickey Mouse, Minnie Mouse, Goofy, and Pluto, taking part. Along with the classic characters, other Disney characters like Simba, Jafar, Captain Hook, and the Genie from Aladdin are all part of the video game. Coincidentally, the Kingdom Hearts games also utilize characters from the Final Fantasy series.

Another boost for sales of "Kingdom Hearts III" could be "Disney Inifinity". I wrote about the upcoming Disney game, that similar to Skylanders, will utilize action figures that are compatible with gameplay. Disney is considering integrating characters from its two recent acquisitions, Marvel and Lucasfilm, into its new franchise. Square Enix could score big if it can get Marvel or Star Wars characters into the newest Kingdom Hearts game. If not, the game will still sell amazingly well.

The addition of "Final Fantasy XV" gives Square Enix a strong lineup for its bestselling franchise. A total of three Final Fantasy games will be released before the end of 2014. While both "Final Fantasy XV" and "Kingdom Hearts III" have long been rumored, few expected both games to be announced and come out in a close time frame. Sales for these two will power shares of Square Enix ahead.

Investing in Square Enix requires a little bit of risk. The company trades in the United States on the Pink Sheets under symbol SQNXF. The company also trades in Germany (E14.BE, E14.F) and Tokyo, Japan. Shares of Square Enix in the United States currently trade at $11.70 per share. Over the last year, shares have traded in a range of $10.21 and $16.15.

I don't normally recommend investing in stocks on foreign exchanges or off the major United States exchanges. However, as someone who has written numerous articles about video game stocks, I find it necessary to point out the huge blockbusters coming to Square Enix over the next two years.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.