Apr. 18, 2014, 4:34 AM
- Microsoft (MSFT) has sold over 5M Xbox One computer gaming consoles to retail shops since launching the device in November, well below the more than 7M PlayStation 4 machines that Sony (SNE) has sold since its product was launched last year as well.
- Still, Xbox One sales have outpaced those of its predecessor, the XBox 360, by over 60% at the same point in time since launch.
- The introductions of the Xbox and PlayStation 4 helped boost U.S. sales of consoles in March by 78% on year to $395M.
- However, sales of videogames fell 28% to $432M, with revenue to multiplayer Internet games such as "World of Warcraft" dropping 19% to $84.8M.
- Tickers: EA, ATVI
Apr. 17, 2014, 6:58 PM
- While U.S. physical retail video game sales have been slumping for some time (as shown by NPD's data), SuperData estimates U.S. digital gaming revenue rose 9% Y/Y in March to $936M.
- Revenue for subscription titles such as Activision (ATVI +1.2%) cash cow World of Warcraft fell Y/Y, but download and free-to-play revenue rose. Electronic Arts' (EA -0.1%) much-hyped Titanfall delivered the most digital revenue among "boxed" titles.
- SuperData estimates conversion rates (i.e. the ratio of paying users to total users) for social gaming platforms rose to 2.3% from 1.9% six months earlier. But Zynga (ZNGA +4.4%), which had a Q4 conversion rate of 1.7% and only averages $0.13 per DAU (less than its closest rivals), continues to trail.
- Zynga rallied today after officially launching FarmVille 2: Country Escape (first announced in March) in the App Store and Google Play. Morgan Stanley praised the game's monetization potential last week.
- In spite of widespread concerns about slumping Candy Crush Saga (KING -1.3%) usage, SuperData thinks the game is holding up reasonably well for now. It estimates spending rose 1.2% M/M (3 extra days helped), with mobile MAUs rising 0.3% and social (read: Facebook) MAUs falling 2.1%.
- Other game developers: TTWO, GLUU, KNM, SGAMY
Apr. 9, 2014, 5:39 PM
Apr. 2, 2014, 11:58 AM
- The rumors were true: Amazon's (AMZN +0.6%) new streaming set-top will support "thousands" of Android games by next month (live blog). To play them, Amazon is providing an optional $40 controller that comes bundled with 1,000 Amazon coins (normally retails for $9.50) to buy games with, and a tablet controller app. A small number of titles can be played with the Fire TV's bundled remote.
- Electronic Arts (EA -0.9%), Take-Two's (TTWO +0.2%) 2K Games unit, Sega, Gameloft, and Disney are among the game developers on board. Amazon, as reported, will also be developing its own titles. The Verge: "The graphics are pretty solid, they seem about on par with what you can get on top-end Android devices. It's not lagging at all."
- Should Sony (SNE -0.6%), Ninetendo (NTDOY), and Microsoft be worried? The Fire TV, and perhaps also gaming set-tops reportedly on the way from Apple and Google, are unlikely to compel hard-core gamers to ditch their PS4s and Xbox Ones. But much like mobile devices, they could gain a strong following among consumers wanting a cheap, simple, casual gaming experience.
- The Fire TV itself will sell for $99 - the same price as Apple TV and Roku 3. It begins shipping today.
- Earlier: Amazon unveils Fire TV set-top
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
Jan. 28, 2014, 12:10 AM
Jan. 27, 2014, 5:35 PM
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%.
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