Video game publishers expect pandemic-fueled industry turbochargers to continue, but engagement is slowing and hurting stocks.
In the profit season, I knew that Wall Street was difficult to compare to last year.. The April-June quarter wrapped the first full calendar quarter of the pandemic stay-at-home order. Given that the media has evolved into a rally, it’s when the demand for video games has skyrocketed as a reliable option for entertainment and online socializing. Millions, if not billions, of places around the world.
The results were still strong, but many companies’ forecasts were astonishing, at least indicating a stagnation in the video game boom and a fall in stock prices overall.
One of the areas that still looks most volatile is mobile games, as two of the biggest names in mobile games are heading in different directions. Mobile is the fastest growing segment of the $ 200 billion video gaming market, and results show that gamers still have mobile phones, even with more outdoor options open. However, the confidence to move forward is not universal.
Thursday’s report caused a lot of confusion and plunged stocks by more than 15%, causing the publisher’s worst. Disappointing outlook and booking Otherwise with a decent earnings report. Cohen analyst Doug Kreuz probably best summarized the week in a note titled “Almost almost finished the earnings season with almost no disappointment.”
“”[Zynga] Management has shown a slowdown in demand later in the quarter, “says Creutz. “This is exactly what we see from Activision, Take-Two, and EA. The beat was big, but it was heavily influenced by the upside-down surprise of the real unit from the new launch title. “
However, Playtika Holding Corp.
Swayed by profits Revenues exceeded estimates compared to losses in the year-ago quarter (although slightly below Street estimates). Israel-based mobile game developer. Published in JanuaryIs considered a top pick by Cowen’s Creutz, as titles such as “Bingo Blitz” and “Solitaire Grand Harvest” show the strongest growth in Zynga’s catalog. Playtika shares rose 13%, the best week.
The consensus from this week’s earnings was that video game engagement slowed a bit, but reached a plateau and is expected to remain strong.
“Twitch data also suggests that game engagement slowed in the second half of the second quarter,” Creutz wrote. “But the same data also suggests that game engagement was stable in July, which is consistent with the guide we saw this week from ATVI / EA / TTWO / PLTK.”
Activision Blizzard Inc.of
Tuesday Revenue report Concerned about how the company dealt with allegations of gender inequality and harassment, results exceeded Wall Street’s estimates, but full-year earnings and booking outlooks weren’t. Still, stock prices were relatively intact, dropping 1.4% in a week.
According to Activision Blizzard, the mobile version of the Call of Duty franchise is expected to consume more than $ 1 billion annually, and the mobile version as a whole accounted for 40% of the company’s bookings this quarter. rice field. The company’s King segment accounted for 28% of revenue from the lead game Candy Crush and other mobile titles.
Take-Two Interactive Software Inc.
Shares fell 8.7% in the week following Monday’s earnings announcement. The company’s report suffered from unchanged outlook for this year. Analysts were hoping for a salary increase, With the announcement that two releases of the game title will be delayed.
Similarly, Take-Two is expanding its mobile services with the acquisition of Socialpoint, Playdots, and now Nordeus. The company states that the title “WWE SuperCard” is the leading mobile game on the 2K label, which has been downloaded more than 24 million times.
Electronic Arts Co., Ltd.
Stock prices fell 5.3% in the week after they exceeded earnings Providing different perspectives In Wednesday’s report, this quarter’s revenue exceeded Street’s estimates, but not the full-year guidance.
EA Mobile revenue was up 8% to $ 218 million and overall revenue was up 6% to $ 1.55 billion. According to the company, “mobile focus” in game production is one of the long-term priorities of the future. Mobile is a “significant part” of the company’s live service, spanning all game categories and accounting for nearly 80% of EA’s revenue.
In the last 12 months, Activision Blizzard stocks have fallen 5%, Take-Two stocks have fallen nearly 11%, EA st
ocks have fallen 7%, Zynga stocks have fallen nearly 20%, and Playtika stocks have fallen nearly 20%. It is 7% below the price. ..By comparison, S & P500 Index
Increased 32%, iShares Expanded Tech-Software Sector ETF
It has increased by 35%.