$GLUU Video Game Stock Roundup: NPD Releases November Numbers; Nintendo's Super Mario Run Launch in Focus
Zacks Investment Research - Fri Dec 16, 8:39AM CST
Among the top stories this week, research firm NPD reported dismal video games sales data for the month of November. This caused widespread concern since November is generally one of the biggest months for video game companies given the holiday season shopping rush. Separately, Nintendo Co. Ltd. (NTDOY released its much anticipated iOS game, Super Mario Run this week.
Recap of the Developments
1. As per a VentureBeat report, The NPD Group issued video game sales numbers for the month of November. As per NPD, overall sales plunged 24% year over year to $1.97 billion. In fact, every category witnessed a record drop. Despite the release of Sony’s SNE PlayStation 4 Pro and Nintendo’s NES Classic (sold 196K units), hardware sales fell 35% to $723.8 million. Declining sales of Xbox One and PS4 were the main reasons. Tougher year-over-year comparisons marred console software sales, which fell 18% to $955.2 million.
Per a NPD analyst, sales in the year-ago period benefited from the super success of Activision Blizzard’s ATVI Call of Duty; Black Ops 3, Electronic Arts’ EA Star Wars Battlefront and Bethesda’s Fallout 4. However, this year’s top three games, Call of Duty; Infinite Warfare, EA’s Battlefield 1 and Nintendo’s Pokémon Sun didn’t make that big an impact. In fact, sales of Infinite Warfare are reportedly down 50% from last year’s Black Ops 3 sales. Though nobody expected Infinite Warfare to outsell Black Ops 3 as the former is a relatively less recognized series, a 50% drop was unexpected. Together, the sale of the top three titles was down 43% year over year in November.
Further, NPD adds that PC software tanked 28% to $27.5 million and accessories sale was down 6% to $259.8 million. A decrease of 49% in interactive gaming toys accessory spending was the main reason behind dismal accessory sales numbers. The launch of PS4 did not help accessory sales either. Sony DualShock 4 was the highest selling gamepad but sales of gamepads overall were down.
2. Nintendo is aggressively pushing into the mobile game space after remaining aloof so far. Nintendo’s much anticipated mobile game, Super Mario Run (SMR) for Apple’s AAPL iOS platform released yesterday for $9.99 across 151 countries. The company, reportedly, expects to release an Android version in 2017. The game is free to play for a few levels, following which gamers will have to shell out $10 to download the whole game.
Analysts differ in their opinions. Some analysts consider this a hefty price tag especially in “developing countries”. Also, the game requires an Internet connection. On the other hand, media reports quote another analyst who is bullish on the stock and expects nearly 40% jump in price. Per the analyst, SMR is Nintendo’s creation and so it stands to benefit from revenues entirely. This, however, was not the case for Pokémon Go. Pokémon Go was a super hit but had limited impact on Nintendo’s financials as it was created by Niantic in association with Nintendo. Consequently, most of the benefit was netted by Niantic. At present, Nintendo carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance
The following table shows the price movement of the major video game companies over both the past five trading days as well as the last six months:
Company
Last 5 Days
Last 6 Months
ATVI
3.58%
-3.50%
EA
4.81%
9.58%
GLUU
-1.42%
-10.68%
MSFT
5.62%
25.4%
NTES
-3.29%
29.84%
TTWO
6.32%
34.52%
ZNGA
-1.05%
7.20%
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