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Video Game Stock Roundup: GME Takes Down EA & Others, PS4 Shines

The week started on a disappointing note for video game stocks after videogame retailer GameStop Corp.GME posted lower-than-expected quarterly numbers. In addition, GameStop's unnerving commentary surrounding Star Wars Battlefront took a toll on Electronic Arts Inc.EA .

On the other hand, while Playstation sold a record 30 million units, Nintendo opened an official eBay store. Microsoft and Sony announced freebies for December.

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1. GameStop's third quarter 2015 earnings and revenues came in below the Zacks Consensus Estimates. The company's results were marred by lower-than-expected sales of new software and hardware as well as a delay in the opening of the Technology Brands store.

In addition, the company revealed that the much anticipated game Star Wars Battlefront registered weaker-than-expected sales. However, the company added that despite a slow start, the game is likely to get a boost from the upcoming and eagerly awaited release of the movie Star Wars: The Force Awakens on Dec 18.

However, it was not enough for harried investors, resulting in a selloff in the Electronic Arts stock. Electronic Arts was down as much as 6% on Monday before it recouped some losses and ended up down 4.75%. Besides Electronic Arts, other video game publishers like Take-Two Interactive Software IncTTWO and Activision Blizzard., IncATVI also closed in the red. While Take-Two was down 2%, Activision lost 0.4%.

Despite GameStop's Star Wars comment, analysts believe that the title will sell over 13 million copies as a result of the holiday season push and the hype surrounding the release of Force Awakens in December, the first Star Wars big screen production in a decade.

2. Sony Corporation 's SNE PlayStation4, the latest in the series of PlayStation video game consoles, achieved unprecedented global sales of 30.2 million units on Nov 22 since making its debut in 2013. Sony has all the reasons to cheer, with PS4 managing to briskly shake off competition from peers such as Microsoft Corp. 's MSFT Xbox One and Nintendo Co. Ltd 's NTDOY Wii U.

Ever since its launch in the U.S. markets, the product has recorded astounding sales of 9.4 million units, as per VGChartz reports. As a matter of fact, Sony's flagship gaming product has emerged as its biggest growth driver of late, pulling it out of the series of dismal performances over the past few quarters. PS4 has also witnessed the "fastest and strongest" demand in the PS hardware history.

3. Japanese video game publisher Nintendo opened an official eBay Inc store. The store will be stocking items like "new and refurbish games, consoles and accessories" on par with the existing retail prices or Nintendo's "current refurbishment pricing."

4. Microsoft and Sony have announced freebies for December for their respective consoles. The titles for PS4 include King's Quest Chapter 1 and Gauntlet: Slayer Edition while those for PS3 include Far Cry 3: Blood Dragon and SSX .

For Xbox One, The Incredible Adventures of Van Helsing and Thief will be free to download for the month. CastleStorm will be free to download on Xbox 360 for the first half of the month while Scared 3 will be available for the second half. Operation Flashpoint: Dragon Rising will be an additional holiday gift.

Performance

The following table shows the price movements of the major video game companies over both the past 5 trading days as well as the last 6 months:

Company Last 5 Days Last 6 Months
ATVI 0.98% 46.52%
EA -0.54% 11.17%
GLUU 7.62% -47.44%
MSFT 1.61% 15.24%
NTES 14.39% 17.34%
TTWO 7.55% 29.29%
ZNGA 5.49% -8.95%

Over the last five trading sessions, Electronic Arts was the only stock in the negative territory with a 0.54% loss. NetEase, Inc. gained the most as it rose 14.39%.

Over the 6-month period, Activision Blizzard surged the most - nearly 46.5%. We believe Activision's huge library of content along with a host of other developments will continue to fuel its rise. The company recently announced the acquisition of Candy Crush maker King Digital Entertainment plcKING for $5.9 billion and strong third quarter 2015 results.

Activision also announced the launch of a film and television unit, Activision Blizzard Studios, paving its path to become a broad-based entertainment company. Its most anticipated title of the holiday season Call of Duty: Black Ops 3 opened to a thunderous response. Black Ops 3 garnered $550 million, globally, in its opening weekend. However, Glu Mobile, Inc. GLUU was down 47.44% over the same time frame.

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SONY CORP ADR (SNE): Free Stock Analysis Report

MICROSOFT CORP (MSFT): Free Stock Analysis Report

ACTIVISION BLZD (ATVI): Free Stock Analysis Report

TAKE-TWO INTER (TTWO): Free Stock Analysis Report

GAMESTOP CORP (GME): Free Stock Analysis Report

ELECTR ARTS INC (EA): Free Stock Analysis Report

NINTENDO LTD (NTDOY): Free Stock Analysis Report

GLU MOBILE INC (GLUU): Free Stock Analysis Report

KING DIGITL ENT (KING): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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