The Zacks Analyst Blog Highlights: Activision Blizzard, THQ, Electronic Arts, Microsoft and Sony

Zacks

For Immediate Release

Chicago, IL – March 13, 2012 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Activision Blizzard Inc. (ATVI), THQ Inc. (THQI), Electronic Arts Inc. (EA), Microsoft Corp. (MSFT) and Sony Corp (SNE).

Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: http://at.zacks.com/?id=5513

Here are highlights from Monday’s Analyst Blog:

Video Games: The Slump Persists

February 2012 was no different for the video gaming industry as it continued to report detrimental sales figures on year-over-year basis. According to market research firm, The NPD Group, US sales for February 2012 was down 20.0% from the comparable previous year to $1.06 billion. The decline can be attributable to the lack of major titles being released by publishers. However, sales figures improved from $750.6 million recorded in January 2012.

Sales through digital downloads of full games and add-on content downloads, MMORPG games, social networking games, mobile games, rentals and subscriptions accounted for an additional $550 to $600 million.

Software sales were down 23.0% to $464.4 million from the previous-year period. Hardware sales also fared no better and were down 18.0% from the comparable previous year to $381.4 million. However, both Software ($355.9 million in Jan 2012) and Hardware ($199.5 million in Jan 2012) sales improved sequentially. Additionally, revenue from the sale of video game accessories was down 16.0 % to $215.2 million from the year-ago period.

Activision Blizzard Inc.’s (ATVI) Call of Duty: Modern Warfare 3 held on to its position as the top selling video game for the fourth month in a row in February 2012. Square Enix Inc.’s Final Fantasy XIII-2 snatched the second position. UFC Undisputed 3 from THQ Inc. (THQI) was third in line followed by Electronic Arts Inc.’s (EA) much-awaited Kingdoms of Amalur: Reckoning in the fourth position. Ubisoft’s Just Dance 3 came in fifth in the list. EA’s Battlefield 3 seems to have lost its sheen and plummeted to the 10th spot from the fifth position it held in the preceding two months.

Now coming to the hardware segment, Microsoft Corp. (MSFT)’s Xbox 360 console system outsold Nintendo Co.’s Wii and hand-held 3DS. In February 2012, a total of 228,000 units and 262,000 units of Wii consoles and handheld 3DS consoles were sold, respectively. Microsoft sold 426,000 units of Xbox 360 and it was the top-selling gaming console. Incidentally, the launch of Sony Corp’s (SNE) PlayStation Vita in late February failed to lift the hardware sales.

Despite the dismal figures in February, analysts tracking the video game industry believe that few big game launches from bellwether publishers could boost revenues in March. Some of the games that are to be launched in March are Nintendo’s Mario Party 9 and Capcom’s Resident Evil: Operation Raccoon City. Incidentally EA’s much coveted Mass Effect 3 has already been released and the company said that it has shipped 3.5 million units of the game in the first week of its release.

We believe that the video game industry is undergoing a massive transition from physical to digital platform. Thus, the corresponding retail sales decline is not unexpected. Digital online games, including used games, rentals, mobile games and social games, have gained tremendous popularity in recent times. We believe that publishing companies having an exposure to these segments would be able to gain a first mover advantage.

However, we also remain cautious about retail sales and believe that strong growth in the digital business will cannibalize the market going forward. According to one of the studies by Strategy Analytics, the global online games market is currently worth $4.0 billion and is expected to triple in the next five years.

Moreover, the overall video game market remains highly fragmented, graced by a large number of companies. This has increased competitive pressures, keeping prices down.

Despite competition and a lackluster macro outlook, we believe that companies with significant exposure to the digital business will stand out even in this sluggish market. Additionally, new game releases and improvement in consumer spending will act in favor of the industry.

Want more from Zacks Equity Research? Subscribe to the free Profit from the Pros newsletter: http://at.zacks.com/?id=5515.

About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today: http://at.zacks.com/?id=5517

About Zacks

Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leon Zacks. As a PhD from MIT Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros at http://at.zacks.com/?id=5518.

Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.

Follow us on Twitter: http://twitter.com/zacksresearch

Join us on Facebook: http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts

Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.

Media Contact
Zacks Investment Research
800-767-3771 ext. 9339
support@zacks.com

http://www.zacks.com

Read the analyst report on ATVI

Read the analyst report on THQI

Read the analyst report on EA

Read the analyst report on MSFT

Read the analyst report on SNE

Zacks Investment Research



More From Zacks.com

Rates

View Comments (0)