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A roundup of recent news relating to game console makers and gaming software publishers:

  • Strong holiday retail sales already priced into the video game stocks? Last week video game retailer GameStop (NYSE:GME) reported total sales of $1.7 billion for the nine-week period ended December 30, a 29% increase from last year, with same-store sales up 24%. GameStop now expects same-store sales to be up 22%-23% in the fourth quarter, and 10%-10.5% for the full year. The news, along with comments from Circuit City and Best Buy, indicated real strength in video games this holiday season, but shares of video game companies did not respond, trading off over the course of the week, indicating much of this upside is already priced into the stocks.
  • Activision (NASDAQ:ATVI) and THQ (THQI) each had a title in GameStop's top-five holiday titles. GameStop also disclosed its five best-selling games this holiday season. In order, they were; Microsoft's (NASDAQ:MSFT) Gears of War, Square Enix's Final Fantasy XII, Nintendo's (OTCPK:NTDOY) Twilight Princess, Activision's Guitar Hero 2, and THQ's WWE Smackdown vs. RAW 2007. We believe strength in these two key franchises points to upside to Activision's and THQ's guidance for the quarter. We think THQ is also likely to benefit from the weak dollar, as WWE is a particularly strong franchise in the U.K. and Europe.
  • EA (ERTS) announces Madden NFL 07 sold more than five million units worldwide. Developed by EA Tiburon, EA believes the game, which is on 10 platforms, is North America's most popular game of 2006. Released this past August, the game sold more than two million copies in its first week. Through November 2006, retail sales for the game are ranked in the top 10 on six platforms and it is the top-selling game on PS2 and Xbox. It is also one of the top-selling games for X360, PS3 and Wii.
  • Demand for latest iteration of Blizzard's World of Witchcraft resulted in large mark-ups on eBay. The Collector's Edition of the World of Warcraft: The Burning Crusade [PC] is selling for three times its retail price of $69.99 on eBay. The game is expected to be released in mid-January and pre-orders for the collector's edition have been sold out for months, with no more reprints planned from Blizzard. World of Warcraft has about 7.5 million subscribers worldwide as of November 2006.
  • FlatOut 2 [PS2, Xbox, PC] sells more than 500,000 units worldwide. Released in North America this past August, the FlatOut franchise has sold more than 1.5 million units to date. The next FlatOut title, FlatOut Ultimate Carnage, is in development and is expected to be released for Xbox 360 this year.
  • This analyst is very happy with the PS3 he got for Christmas. So far we have experienced no glitches. Right now we are running a cable to the router as no WiFi connection is currently available. We do have a wireless keyboard and mouse from Logitech and can now access the Internet on the TV. We are about two-thirds of the way through Call of Duty 3 and the graphics and gameplay are great.
  • Source: Game Points: Game Console and Software Stock Update