WHAT IS UP WITH MIDWAY??????
AP
Video Game Stock Up on Strong Sales Data
Friday July 14, 2:26 pm ET
By Barbara Ortutay, AP Business Writer
Video Game Stocks Jump After Strong June Sales Data
NEW YORK (AP) -- Shares of video game companies advanced Friday following robust sales data from NPD Group, a market research company, which said the industry's software sales rose 15 percent in June.
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Overall video game sales climbed 25 percent, with no category experiencing losses over the year-ago period. Software sales totaled $444.4 million, up from last year's $387.1 million, while hardware sales were up 25 percent to $297.8 million.
The results gave a boost to video game stocks at a time when many companies have been posting disappointing results, and as some customers wait for the release of next-generation players to buy games. Sony and Nintendo are both set to release new consoles next fall.
Anita Frazier, NPD's video-game analyst, said the results took everyone by surprise.
"It's really a case of the whole being worth more than the sum of the parts," she said. That the increases were so widespread -- and not limited to one company or platform -- points to the overall health of the industry, she added.
While June is a seasonally strong month for video game sales, this month's performance exceeded expectations. The sector's general malaise, Frazier said, is over.
It also helped that there was something for everyone, amount new titles, with good selling "Mature" as well as "Everyone" rated games, she said.
UBS analyst Michael P. Wallace also said the strong software sales should mean most of the negative surprises are behind the industry.
"No more earnings misses and better news flow should mean that we have seen the bottom for these stocks," he wrote in a note to clients.
Citigroup's Elizabeth Osur attributed the higher sales to solid demand for Nintendo's handhelds as well as a rebound in PlayStation 2 demand thanks to popular games.
PlayStation was the best-selling video game console during the month, selling about 311,900 units, while Nintendo's DS won out as the best-selling portable device, with more than 593,400 units. Microsoft's Xbox360 sold 277,000 units in June.
Shares of Electronic Arts Inc., the biggest video game publisher in the U.S., rose $1.70, or 4 percent, to $45.22 in afternoon trading on the Nasdaq. The stock has changed hands between $39.99 and $63.12 in the past 52 weeks.
Sales of the company's "FIFA World Cup 2006" and "NFL Head Coach" games helped lead to better-than expected NPD results, according to Osur, who rates the company "Hold."
Even the battered shares of Take Two Interactive Software Inc. edged up Friday, climbing 29 cents, or 3 percent, to $10.13 on the Nasdaq. The company is under an informal investigation by the Securities and Exchange Commission over its stock options practices, and was also recently hit with two subpoenas over hidden sex scenes in its popular "Grand Theft Auto: San Andreas" video game, as well as, partnering agreements, earnings results and acquisitions.
Video game retailer GameStop Corp. was among the few losers, but Friday was also rough day for the broader market. The company's shares slid 58 cents, or nearly 2 percent, to $38.76 on the New York Stock Exchange. On Thursday, GameStop shares closed up nearly 7 percent in anticipation of the monthly sales data.
Shares of THQ Inc. jumped $1.36, or almost 7 percent, to $21.58 on the Nasdaq, having traded between $18.54 and $28.17 in the past year.
Activision Inc.'s shares rose 36 cents, or 3 percent, to $11.27 on the Nasdaq. The stock has changed hands between $10.47 and $18.03 in the past 52 weeks.
Shares of Midway Games Inc., slipped 3 cents to $9.09 on the NYSE. The stock is majority owned by National Amusements, which is controlled by Sumner Redstone, the chairman of the boards of Viacom and CBS.
Atari Inc.'s shares rose 7 cents, or 12 percent, to 65 cents on the Nasdaq.
AI
