Mar. 13, 2014, 9:28 AM
- BofA/Merrill's Justin Post has upgraded Activision (ATVI) to Buy, and cut archrival Electronic Arts (EA) to Neutral.
- Post sees several catalysts for Activision, including an upcoming Diablo 3 expansion pack, the 2H14 arrival of a World of Warcraft expansion pack and (possibly) a Chinese online version of Call of Duty, and (most notably) the Sep. 9 launch of first-person shooter Destiny, which Activision thinks could be its third billion-dollar franchise.
- His 2015 Activision EPS forecast has been raised to $1.38 from $1.31, and his PT to $25 from $20.
- As for EA, Post sees fewer catalysts following the March 11 Titanfall launch, and "more compelling content" over the next six months from the likes of Activision, Ubisoft, and Sony. Though he thinks EA has strong FY16 (ends March '16) growth potential thanks in part to new Battlefield and Star Wars launches, he doesn't see any titles driving major FY15 upside.
Mar. 11, 2014, 4:34 AM
- Microsoft (MSFT) is carrying out a massive launch of hotly anticipated computer game "Titanfall" today, with the company hoping that the sci-fi combat title will boost sales of the Xbox One, which appears to be lagging behind Sony's (SNE) PlayStation 4.
- The strategy is one that worked with "Halo," a sci-fi shooter game that was launched in 2001 and became a blockbuster that fueled sales of the Xbox.
- Titanfall was developed by Respawn Entertainment and is being published by Electronic Arts (EA).
Feb. 7, 2014, 7:15 PM
- More than two decades have passed since Activision (ATVI +14.4%) last traded at current levels, as a Q4 beat, slight dividend hike, World of Warcraft subscriber growth, and game pipeline enthusiasm took precedence over below-consensus 2014 guidance.
- Rivals Electronic Arts (EA +2.8%) and Take-Two (TTWO +2.2%) joined in on the fun. Shares of both companies are roughly $1 removed from their respective 52-week highs.
- BofA/Merrill's Justin Post notes Activision has a history of issuing conservative full-year guidance to start the year, and considers the WoW sub growth a pleasant surprise.
- Wedbush's Michael Pachter is upbeat about a 2014 pipeline that includes updates to WoW and Diablo III, and the launch of anticipated open world first-person shooter Destiny. He thinks the game could produce $500M or more in sales following its September release.
- Activision stated on its CC (transcript) it thinks Destiny could be its third billion-dollar franchise (after Call of Duty and Skylanders), and that it's moving to a 3-year development cycle for Call of Duty titles (three studios take turns launching titles) to allow for better game development.
Jan. 29, 2014, 10:03 AM
- Electronic Arts (EA +0.5%) has been upgraded to Buy by BofA/Merrill following yesterday's mixed FQ3 results and FY14 guidance cut. The upgrade has helped EA turn positive.
- Tableau (DATA +1.2%) has been upgraded to Buy by Goldman ahead of its Feb. 4 Q4 report.
- Teradata (TDC -2.7%) has been cut to Sell by Goldman ahead of its Feb. 4 Q4 report.
- Dassault (DASTY +1.2%) has been upgraded to Buy by BofA/Merrill. Q4 results are due on Feb. 6.
- Vimpelcom (VIP -3.6%) has been cut to Neutral by HSBC.
- Digital Realty (DLR -2.6%) has been cut to Underperform by Macquarie. Q4 results are due on Feb. 24.
Jan. 28, 2014, 6:15 PM
- In addition to missing FQ3 revenue estimates by $90M, Electronic Arts (EA) is guiding for FQ4 revenue of $800M and EPS of $0.09, below a consensus of $827.2M and $0.10.
- Revenue from digital channels rose 27% Y/Y in FQ3 to $407M. Sales from traditional game publishing and other channels, boosted by the Xbox One/PS4 launches, rose 38% to $742M.
- Xbox/PS4-related sales totaled $392M in FQ3 (25% of total revenue). Xbox 360/PS3-related sales fell 4% to $707M, and total console-related revenue rose 47% to $1.11B (71% of total revenue).
- Mobile game-related sales rose 25% Y/Y to $124M, and made up 8% of revenue. The Simpsons: Tapped Out has now produced $130M in revenue over its lifetime.
- Thanks to job cuts, R&D spend fell 1% Y/Y to $275M, and sales/marketing spend fell 3% to $214M.
Jan. 28, 2014, 4:03 PM| Comment!
Jan. 28, 2014, 12:10 AM
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Jan. 17, 2014, 9:31 AM
- Electronic Arts' (EA +11%) Battlefield 4, Madden NFL 25, and FIFA 14 respectively claimed spots #2, #4, and #9 on NPD's December bestseller list for U.S. physical retail game sales. Those rankings are hardly changed from November (#2, #4, and #10). Moreover, EA's total sales through the physical retail channel rose an estimated 47% Y/Y.
- "EA Scores December Hat Trick," reads the title of a bullish Cowen report. The firm thinks NPD's numbers suggest EA has a shot at beating consensus estimates and guidance forecasts when it reports on Jan. 28. Longbow, which had been prepared to cut its EA estimates in response to NPD's numbers, is hiking them instead.
- On the other hand, NPD thinks Activision's (ATVI -0.1%) U.S. physical retail sales fell 40% Y/Y in December, thanks in part to tough Call of Duty comps. Call of Duty: Ghosts was the bestselling title for the second straight month, but Skylanders: Swap Force fell to #10 from #7. Shares +0.9%.
- Take-Two's (TTWO +2%) Grand Theft Auto V, which debuted in September to record sales, fell to #7 from #5. NBA 2K14 rose a spot to #5.
- Altogether, NPD thinks U.S. physical retail game sales, still pressured by a shift to digital channels and mobile gaming, fell 17% Y/Y. That's a little better than November's 24% drop.
- Previous: EA, Activision, Take-Two underperform after GameStop warns
Jan. 17, 2014, 9:13 AM
Jan. 14, 2014, 2:27 PM
- Activision (ATVI -1.7%), Electronic Arts (EA +0.3%), and Take-Two (TTWO -1.2%) are underperforming on a strong day for tech stocks after GameStop (GME -19.4%) reported disappointing holiday game sales and issued a Q4 EPS warning.
- Though GameStop saw its new hardware sales (a low-margin business) double Y/Y thanks to the PS4/Xbox One launches, a bigger-than-expected decline in PS3/Xbox 360 game sales led new software sales (high-margin) to drop 22.5% Y/Y. Pre-owned sales rose 7%, and digital sales 15%.
- Compared with peers, Electronic Arts is holding up relatively well thanks to a Credit Suisse upgrade to Outperform. EA reports on Jan. 28, and Take-Two on Feb. 3. If history is any guide, Activision should report in early February.
Jan. 7, 2014, 1:30 PM
- Sony (SNE +0.1%) announces at CES PlayStation 4 end-user sales (i.e. sell-through) reached 4.2M as of Dec. 28. That figure suggests the PS4 soundly outsold the Xbox One (MSFT - 3M+ sales in 2013) last year, and has a good chance of surpassing Sony's target of 5M FY14 (ends March '14) sales.
- Wider distribution - the PS4 is on sale in 53 countries, the One is only available in 13 - has helped Sony's next-gen console outsell Microsoft's. But so has a lower price tag ($399 vs. $499) and the backlash to the used game restriction and Internet access requirements initially planned for the One (before Microsoft backtracked).
- Sony has also announced the launch of PlayStation Now, its anticipated cloud gaming service. The service, which leverages Gaikai's cloud gaming platform, will provide access to PS2/PS3 titles, and (since it's cloud-based) run on everything from home consoles to TV sets to handheld/mobile devices.
- Also announced: a Web-based TV service that will include VOD content and a cloud-based DVR. However, Sony is short on details for now. Intel and others have taken stab at offering such a service, only to be thwarted by content owners and incumbent pay-TV providers.
- PS4 and Xbox One CPU/GPU supplier AMD (AMD +1.6%) is rallying for the second straight day. Game developers are also higher: EA +3.2%. TTWO +3.2%. ATVI +1.6%.
Jan. 2, 2014, 5:49 PM
- VentureBeat reports Dave Roberts, the CEO of Electronic Arts' (EA) PopCap mobile games unit, is leaving the company, and will be replaced by co-founder John Vechey. Another co-founder, Jason Kapkala is also reportedly resigning, but will remain a "creative consultant."
- EA acquired PopCap, creator of the popular Plants vs. Zombies and Bejeweled franchises, for $750M + $550M in performance incentives in 2011. But the unit has had trouble monetizing new titles amid an industry shift towards free-to-play mobile games, and has seen multiple layoffs.
- The Simpsons: Tapped Out and Real Racing 3, arguably EA's two biggest recent mobile successes, came from other company divisions.
Dec. 13, 2013, 11:08 AM
- NPD estimates U.S. physical retail video game sales fell 24% Y/Y in November, after having risen 12% in October and (thanks to the Grand Theft Auto V launch) 52% in September. The fact many gamers directed their discretionary income towards buying next-gen consoles may have played a role here.
- Electronic Arts (EA +7.2%) investors appear pleased Battlefield 4 came in at #2 on NPD's bestseller list, in spite of the well-publicized bugs and gameplay issues EA is scrambling to address. In addition, Madden NFL 25 is ranked #4 after falling out of the top-10 in October, and FIFA 14 is at #10.
- Activision's (ATVI +0.1%) Call of Duty: Ghosts topped the bestseller list, and Skylanders: Swap Force is ranked #7. Take-Two (TTWO +2%) investors appear content with the fact GTA V came in at #5 after easily topping NPD's list for two months; Take-Two's NBA 2K14 is ranked #6, up one spot from October.
- NPD also states the PS4 outsold the Xbox One in November both in terms of hardware and game sales. But that might simply be the result of an earlier launch (Nov. 15 vs. Nov. 22). Sony claimed 2.1M+ PS4 sales as of Dec. 3, and Microsoft claimed 2M+ Xbox One sales as of Dec. 11.
Dec. 6, 2013, 11:01 AM
- Electronic Arts (EA +4.6%) has recouped the lion's share of the losses it saw yesterday in response to news its DICE unit is halting work on future projects to fix Battlefield 4. The efforts of several analysts to defend the gaming giant are likely helping out.
- While admitting Battlefield 4's game engine needs to be fixed, Piper's Michael Olson deems it unlikely EA's efforts have pulled in teams working other projects, and believes Battlefield 5 will ship in FY15 (ends March '15). Moreover, though he's only assuming 10M Battlefield 5 shipments for FY15 (compared with 13M Battlefield 4 shipments for FY14), Olson thinks EA can deliver more than $4.3B in FY15 revenue (consensus is at $4.23B).
- Pac Crest's Evan Wilson is more cautious. He argues Battlefield 4's disappointing initial sales, lukewarm reviews, and bugs have "lessened the value of the Battlefield franchise and the probability that it can indeed knock Call of Duty (ATVI +1.9%) off its perch." He also thinks they put into question "EA’s decision to standardize on the Frostbite [game] engine."
- Also: EA has launched iOS/Android games for its popular Heroes of Dragon Age strategy combat franchise. Like other EA mobile titles, the games are free to download, and monetized via in-app purchases.
Dec. 5, 2013, 11:44 AM
- With complaints about bugs and connectivity issues piling up for Electronics Arts' (EA -7.3%) recently-launched Battlefield 4, EA's DICE unit (responsible for developing the game) is halting the release of additional Battlefield 4 expansion packs, and is also stopping work on all "future projects," until the game's issues are sorted out.
- EA investors aren't responding well to the news. Without healthy sales of Battlefield 4 and its $50 premium service, EA could struggle to hit its Dec. quarter forecasts. Moreover, DICE's project halts could delay the release of two anticipated titles: Star Wars: Battlefront (due in 2015) and Mirror's Edge 2 (due in 2015/2016).
- Activision (ATVI -2%), whose mainstay Call of Duty franchise is the top rival to EA's Battlefield franchise, is also selling off.
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