|Bid||43.05 x 1000|
|Ask||43.40 x 800|
|Day's Range||43.05 - 43.12|
|52 Week Range||42.43 - 61.02|
|Beta (3Y Monthly)||1.18|
|PE Ratio (TTM)||9.07|
|Forward Dividend & Yield||0.26 (0.57%)|
|1y Target Est||78.00|
Before Japanese electronics firm Sony (NYSE:SNE) got its groove back, critics slammed Sony stock as an irrelevant investment. But one chapter of the book remained immensely viable: PlayStation. Even now, with shares comparatively out of the doldrums, SNE depends heavily on its gaming division.Source: Dalvenjah via FlickrUnfortunately, another titan put this segment on notice. Joining rival Amazon (NASDAQ:AMZN), Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) announced on Tuesday its new gaming platform, Stadia.Based on streaming technology, Stadia will advantage Alphabet's cloud-computing networks to deliver hardware-free gaming. The idea here is to promote open-source entertainment, which would disrupt Sony and console-maker Microsoft (NASDAQ:MSFT).InvestorPlace - Stock Market News, Stock Advice & Trading TipsUnsurprisingly, SNE stock dropped more than 1% in the regular session, and shed nearly 2% during extended hours. Nintendo (OTCMKTS:NTDOY) also felt the heat. As a company levered mostly to consoles, Nintendo depends on a healthy gaming market. With Alphabet pushing its way in, NTDOY lost over 2%.Over many troubled years, Sony jettisoned several unprofitable businesses. A major reason why Sony stock became a turnaround success was management finally realized what works, and what doesn't. But the consistent winner throughout was PlayStation. If anything threats this iconic game console, it's presumably lights out for Sony stock. Two Scenarios for SNE stockGiven the recent announcement, most folks fall under two camps regarding SNE stock: either Alphabet (or Amazon, or both) eat Sony's lunch, or they fall short. Both sides of the debate find support from readily available evidence. * 10 Stocks on the Rise Heading Into the Second Quarter First, the bear case probably makes the most sense to passersby. One of the underlying themes of modernization is the de-cluttering effect. Back in the 1990s, owning the latest tech meant myriad wires bulging out of desks and other fixtures. Today, you can enjoy profound computing power condensed into a neat, little rectangle.Why, then, should our gaming apparatuses be any different? Amazon responded with their streaming-based gaming platform, and now we also have Google's Stadia.In addition, gaming transitioned into a serious economic proposition. Put another way, consoles are expensive. Many folks, particularly casual gamers, don't want to shell out $400 or $500 for yet another machine. This situation becomes more difficult during the holidays when companies prefer to release their flagship products.But with Stadia, the hardware is in the cloud, eliminating significant costs. Over time, Alphabet may eliminate Sony stock.However, Sony is deeply entrenched in the gaming world. While the consumer-tech firm has lost ground and credibility in several segments, it features a prized content moat.Kantan Games' CEO Serkan Toto wrote to CNBC that "gaming is a very nut to crack." While I respect Alphabet's ability to disrupt any tech sector, attacking Sony directly features a low probability of success. After all, the company sold a staggering 91 million-plus PS4s total. This figure utterly dominates Microsoft's and Nintendo's tally.These aren't two-bit players. So for Alphabet to disrupt SNE stock on gaming's turf? I just don't see it. Google Ironically Benefits Sony StockOverall, I wouldn't hit the panic button on SNE stock. While increased competition detracts nearer-term, the long-term picture remains incredibly viable for Sony.What casual observers don't understand is that the gaming equation isn't binary. Just because a disruptor like Alphabet or Amazon enters the fray doesn't necessarily spell doom for Sony stock. That's because the offered platform (i.e., streaming) is contextually inferior to the console.Earlier this year, I argued that Amazon's game-streaming venture was neat, but not a disruption. For instance, network latency represents a major problem and frustration for online gamers. But for Amazon to essentially stream the entire hardware via the net? It's possible but not at all practical. * 5 of the Best Dow Jones Stocks to Buy for Solid Dividends With Stadia, Google follows the same flawed playbook. But what's ironic and humorous is that Google went the streaming route to supposedly save gamers money on console purchases. How noble of them. However, they left out an important detail: to actualize their streaming vision requires more funds from gamers.Most of us probably assume that we have uniform network capabilities. But the reality is that network capacity (and prices) vary wildly across different regions. Therefore, gamers living in "underprivileged" communities must fork over additional money to practically advantage Alphabet's new platform.On the flipside, you only have to purchase a console once. This is especially true for casual gaming enthusiasts, the very market at which Google is aiming. Because why would a casual gamer shell out money in perpetuity (via high-speed internet subscriptions) to effectively play Stadia games?Ultimately, I'm staying the course with Sony stock. Like Amazon, Alphabet introduced an interesting concept. However, it's no match for SNE and its multiple decades of gaming infrastructure and expertise.As of this writing, Josh Enomoto was long SNE stock. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Invincible Stocks Leading The Bull Market Higher * 5 Dow Jones Stocks Coming to Life * 7 of the Best High-Yield Funds for 2019 and Beyond Compare Brokers The post Sony Stock Has Nothing to Fear From Alphabetas Stadia appeared first on InvestorPlace.
Sony’s stock price has less upside due to earnings risk in its PlayStation gaming business, according to Jefferies.
Google is leveraging Advanced Micro Devices (AMD) Radeon datacenter GPUs customized for Stadia cloud-based game streaming service.
[Editor's note: This story was originally published in November 2018. It has since been updated and republished to coincide with today's rout in video game stocks.]If you're looking for an investment sector that is very likely to rise higher, video game stocks are your ticket. The concept of the video game has evolved from nerdy niche to mass mainstream infiltration. Still, powerful fundamental tailwinds haven't prevented video game stocks from absorbing huge losses.Indeed, anywhere you look, the major (and minor) indices are flashing red. The broader markets finished 2018 down 6.2%, and our own Dana Blankenhorn, in November 2018, stated bluntly "we're already in a bear market." Any contrarian analyst would be hard-pressed debating Blankenhorn on this issue as the volatility persists into 2019.InvestorPlace - Stock Market News, Stock Advice & Trading TipsI'm certainly not going to attempt it, especially if I'm looking at esports and gaming stocks. The video game as an investment vehicle is a platform that has profited many investors handsomely over the years. Unfortunately, the declines in video games and esports stocks over the past year have forced everyone to rethink their assessments.I can't deny the obvious: This is a time when all market participants should strongly consider protective measures. We have many factors that are completely unrelated to video games but could end up roiling video game stocks. However, I'd also caution against overreactions. Recall that the Dow Jones lost double digits between late January and early February of 2018 … * 7 Invincible Stocks Leading The Bull Market Higher The point is to protect yourself from this violent storm, but also to realize that all storms eventually fade away, producing excellent deals only in hindsight. If you've got the nerve, here are seven video game stocks on serious discount. Sony (SNE)Source: Dalvenjah via FlickrWhen you think about the modern video game, you immediately think about Sony (NYSE:SNE). Admittedly, SNE stock has become a running joke within consumer-electronics circles for the underlying firm's other endeavors. For instance, its smartphone is nowhere near as popular as Apple's (NASDAQ:AAPL) iPhone, and it once ran a computer-monitor business.But don't ever question SNE stock for its part in advancing the video game to the mainstream.Its PlayStation console resonates deeply with consumers, and better yet, it keeps improving. Just a few days ago, Sony announced during the Consumer Electronics Show (CES) that the current-generation PlayStation 4 hit 91.6 million unit sales. More impressively, this tally occurred over roughly a five-year lifespan.Of course, the markets don't typically respond to past achievements. What makes SNE stock so compelling for the video game industry is corporate synergy. Make fun of Sony all you want, you can't deny its vast entertainment portfolio. Management can easily leverage this for exclusive titles, which they do frequently for marquee brands. Microsoft (MSFT)Source: Shutterstock Every great organization has an equally great competitor. In the war of supremacy for the video game, we have two top console-makers: Sony and Microsoft (NASDAQ:MSFT). The rivalry between the two tech giants is no joke for many gaming enthusiasts.Microsoft stopped reporting sales figures for its Xbox console, which understandably drew snide snickering, but estimates put it around the 40 million mark. Based on this, Sony is vastly outpacing Microsoft in the console wars. But that hasn't stopped MSFT stock from making significant gains in the markets.Part of the reason is that in terms of graphics and gameplay capabilities, Microsoft has largely gone toe-to-toe with Sony. Additionally, the house that Bill Gates built features its own batch of attractive exclusive titles, including the ultra-popular "Halo" series. Naturally, this has encouraged long-term investors to pile in on MSFT stock. * 10 Companies That Could Post Decelerating Profits And while I'm a Sony guy, I think Microsoft offers better overall stability. Along with its video-game business, it has a virtual lockdown on PC operating systems and various pieces of professional software. Plus, MSFT stock pays a much higher dividend, which isn't something to ignore at this juncture. Nintendo (NTDOY)Source: Shutterstock In my opinion, and those of fellow gamers, the architect of today's video game is Nintendo (OTCMKTS:NTDOY). However, other video game stocks have captured investors' attention. Moreover, as a Japanese over-the-counter name, NTDOY stock doesn't always generate positive news.That has proven especially true in 2018. Last year, NTDOY stock returned handsome monetary rewards for shareholders thanks to the Nintendo Switch. This spectacular console is actually a hybrid device. Nintendo designed the Switch primarily for home usage, but you can just as easily take it on the road. However, great news becomes old news quickly, and shares faltered.Still, the scope of the damage seems excessive. Over the past year, NTDOY stock has dropped a staggering 30%. While further losses are not out of the question due to the overall market panic, the bears are overlooking the company's long-reaching brands. For instance, the "Mario Bros." franchise is gaming gold, which Nintendo can leverage for profitable synergies. Electronic Arts (EA)Source: Shutterstock For anybody who has picked up a video game in the last decade, chances are, you fed the Electronic Arts (NASDAQ:EA) cash cow. From developing games for the Commodore Amiga -- does anybody remember that? -- to driving the latest innovations in esports, EA stock is a mainstay within the industry.That said, video game stocks have incurred horrific losses, and Electronic Arts was not spared in any way, shape or form. Since July 25, EA stock has hemorrhaged more than 43% of market value. Some of that was due to the poor outlook given in its first-quarter fiscal 2018 earnings report. But later losses stemmed from internal issues, such as the delayed launch for its heavily-anticipated video game Battlefield V.I understand why investors are now hesitant on EA stock. A few months ago, I provided my analysis on the company's extreme volatility. That said, my ultimate take is that Electronic Arts suffers from fixable problems. * Mizuho: 7 Long-Term Value Stocks to Buy Now Moreover, they leverage an enviable sports-licensing franchise. No matter what happens, throngs of gamers always eagerly await the latest iteration in the Madden or FIFA series. On the surface, such fandom seems irrational because the changes are minute. Still, the consumers are shelling out big bucks every year, so who am I to judge? Activision Blizzard (ATVI)Source: Shutterstock One of the biggest reasons why the video game industry has captured mainstream attention is the proliferation of the online shooter genre. And in this genre, no one does it better than Activision Blizzard (NASDAQ:ATVI).Over the last few years, ATVI stock has skyrocketed based largely on its Call of Duty franchise. Rather than being shunned by the real heroes in uniform, our military forces embrace these games. Earlier last year, Activision announced that it donated more than $100,000 worth of Call of Duty games to the United Service Organizations, or USO.However, like Electronic Arts, ATVI stock incurred heavy losses in the markets. Since the close of Oct. 1, Activision shares have tanked 40%. A major culprit is fierce competition, particularly from Epic Games' Fortnite.In the long-term, though, ATVI stock looks very intriguing. Over a year-and-a-half of market gains was wiped out in less than two months' time. That's a little bit over the top considering that the company levers one of the most popular franchises among video stocks. Nvidia (NVDA)Source: Shutterstock Semiconductor firms like Nvidia (NASDAQ:NVDA) started to light up the markets in 2016, and that momentum continued into last year. Unfortunately, we learned a physics lesson with NVDA stock: what goes up must come down.And shares are doing exactly that. What appeared to be a promising start for 2018 turned into a veritable nightmare. Between the January opener and the end of September, NVDA stock gained nearly 44%. Since the beginning of October, however, the company has tumbled over 48%, finishing the year down 31%.As a leader in advanced technologies, Nvidia took the brunt of the sector fallout. The geopolitical wrangling between the U.S. and China isn't helping matters. Plus, the severe plummeting in bitcoin prices is likely to negatively impact its crypto-mining-specific graphics processing units, or GPUs. * 7 Stocks to Buy That Are Run By Billionaires Nevertheless, I really like NVDA stock, especially at these prices. I'm not the only one, as notorious short-sellers Citron Research just recently reversed their bearish take on the company. While you shouldn't rush in simply based on one expert opinion, Nvidia offers exposure to multiple next-gen businesses. I doubt that NVDA will stay deflated for long. GameStop (GME)Source: Shutterstock In following with my usual routine of sticking speculative names in the back, I bring to you GameStop (NYSE:GME). GME stock is easily one of the riskiest investments among video game stocks. The company pays out a near-10% dividend, which tells you all you need to know.The other reason that GME stock is down -- aside from all the terrible factors that slammed valuations -- is related to its PR crisis. Many gamers hate GameStop because the retailer rips off customers who are looking to trade in their games and paraphernalia.That's true, but at the same time, you can't have it both ways. The reason why other gamers love GameStop is due to their extensive library of preowned products. In my opinion, it's far superior to online sales and subscription-based services due to its easy return policy: if you don't like a particular video game, just return it.This return policy is a major but underappreciated benefit for GME stock because many gamers are young. They (or their parents) may not have the funds for subscription services. GameStop gives these customers better pricing and superior flexibility.As of this writing, Josh Enomoto was long SNE and bitcoin. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Key Emerging-Market Stocks to Buy for Contrarian Investors * 7 Stocks at Risk of the Global Smartphone Slowdown * 7 Pharmaceutical Stocks That Just Raised Prices This Year Compare Brokers The post 7 Video Game Stocks on Steep Discount appeared first on InvestorPlace.
One of the companies making the biggest splash at 2019's Games Developers Conference (GDC) in San Francisco isn't Microsoft (NASDAQ:MSFT) or Sony (NYSE:SNE) … it's Alphabet Inc's (NASDAQ:GOOG, NASDAQ:GOOGL) Google, which just announced its own dedicated cloud streaming platform for gaming -- Stadia.Source: Stadia The move to cloud gaming has long been suspected. Google spent the past few months testing "Project Stream," which gave users access to Assassin's Creed Odyssey through Chrome of all places.By most accounts, it was a success, with Polygon's Austen Goslin describing the experience of the browser, cloud-based stream as "surprisingly great":InvestorPlace - Stock Market News, Stock Advice & Trading Tips"The first, and most surprising, thing you'll likely notice when the game loads is that it … works. Assassin's Creed Odyssey runs about as well from the cloud as if you had just installed the game normally. Movement is responsive, and combat feels fluid. Even dodging enemy attacks was easy, and I never fell victim to the kind of input lag that has often plagued game streaming in the past."That's high praise.[Editor's Note: This story was originally published Tuesday and has been updated with new information.]I've played my fair share of game streams via Sony's PlayStation Now, and the experience was nothing short of miserable. With Stadia, Google has shown (from GDC's stage) instant access to games from the jump -- no downloading or waiting. But will it actually work that well, for everyone, consistently? * 7 Video Game Stocks on Steep Discount And why would Google decide to jump into the video game fray? What's the upshot here, if any, for GOOGL stock? Let's unpack this bit by bit. Why Google Thinks It's a Good IdeaWhen I first heard that Alphabet Inc's Google would be unveiling a gaming platform, my first thought was "remember Google Plus", followed by "remember Google Glass", followed by … you get the idea. There's a reason Alphabet was formed in the first place (aside from the muddy politics of ownership) -- to eke out its moonshots from the rest of the business.I have doubts that Google's gaming ambitions will fall into the "serious" money-making side of Alphabet's business. (GOOGL stock is pretty much flat today, as investors are also lukewarm about all of this.)As Twitch streamer "King Gothalion" put it live on stream this morning: "I don't think gamers will support it … it would be like Facebook getting into the gaming industry." I'm paraphrasing here, but that was the gist of what he said. And I agree. The only serious contribution Facebook brought to the video game industry, it bought. Aside from that, FB has tried and failed to crack the gaming-verse for several years, finding brief success with flashes in the pan (Farmville) but nothing that would momentously impact its business. Most people don't even have faith in Oculus anymore. So why would Google think it can compete?It doesn't.Google's endgame here is what its endgame has always been -- access to more users' data. Facebook may not have beaten Microsoft or Sony, but its social-based games did attract people into its ecosystem and "persuaded" them to give up more of their data. If Google can accomplish this, it has a loss leader it can live with.Think about the troves of data it can collect by siphoning gamers into its ecosystem, as they buy, stream, watch and use any number of Google services across any number of devices.Sure enough, a gaming system that exists purely in the cloud does stimulate curiosity -- access to triple-A games without having to buy an expensive gaming system that you're only going to replace in three to five years? Instant access, and the ability to seamlessly move from device to device without stopping your game? Yeah, I'd at least check that out.Since Google's streaming platform doesn't require a console and, instead, will be playable on Chrome or any number of everyday devices, and because Google's already-existent data centers will handle the heavy calculations required to stream, there's really nothing for Google to invest in here aside from games developers themselves, and the talent to run Stadia. That's a drop in the bucket for Alphabet Inc. Why It's a Terrible IdeaThere's the big question of how Google expects to pull off the glossy promises it made about Stadia.Because of its very nature, you need to always be online to play games on Stadia. That didn't work out well when Microsoft tried it with Xbox One back in 2013, and I don't expect it to work now.When Microsoft attempted to bill the Xbox One as an always-online console, one of its employees told people to "deal with it" in regards to not always having internet access:Source: EngadgetNo matter how perfect it looked on stage, there are always issues when dealing with internet speeds in the real world, in real time. The same Polygon writer who praised the platform for its responsiveness also found some issues [emphasis mine] in Project Stream's test:"The only consistent downside to the streaming version of the game, which I found across all hardware and connections I tried, was some fairly aggressive audio compression. This was, at its very worst, a noticeable issue, and that was only during some of the game's louder cutscenes. For the most part, while wandering around the world and completing quests, the audio was perfectly fine."Imagine if you were a user in, say, rural Virginia? How would this work without an extensive infrastructure overhaul?Google didn't even try to alleviate these concerns, skipping over questions about input lag and general connectivity issues completely. How fast does one's internet need to be to stream games optimally?No one knows.[Update: Since its announcement on Tuesday, Mar. 19, Google has revealed internet speed recommendations of 25 megabits per second for smooth, 60 frames per second gameplay at a 1080p resolution. The internet speed recommendation will be greater -- up to 30 megabits per second -- for 4K resolutions. Furthermore, Stadia will adjust a user's resolution based on their bandwidth speed, so lower resolutions will also be possible on the system.Addressing latency concerns, The Verge, asserts that the internet speed won't have a direct impact, but rather the proximity to the "server you're playing on" will be the determining factor.] * 5 of the Best Stocks to Buy Under $10 But seriously, how tone deaf are Alphabet's executives to think that releasing this now, let alone at all, would be a good idea?We live in a post-Cambridge Analytica world, and a world where YouTube's algorithm is so broken, it's directing users to white supremacist content from, interestingly enough, video game streamers. The last thing Google should be doing is pointing more people in the way of a broken system, touting it as a feature and not a bug.Instead, Google is releasing an always-online platform to interact more deeply with YouTube's faulty algorithm, complete with a controller and a microphone to access Google Assistant.Good luck, I guess.As of this writing, John Kilhefner did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Financial Stocks to Invest In Today * 7 Single-Digit P/E Stocks With Massive Upside * 5 Chip Stocks on the Rise Compare Brokers The post Google's Stadia Leaves Us With More Questions Than Answers appeared first on InvestorPlace.
Alphabet's (NASDAQ:GOOG, NASDAQ:GOOGL) Google division took the wraps off its streaming gaming platform at a GDC 2019 keynote on Tuesday. Formerly known by the code names Project Stream and Project Yeti, the new game service is called Stadia, and it will launch later in 2019. While Alphabet stock was up a percent or so, the big winners appear to be companies that will be needed to support Stadia. Game developer Activision Blizzard (NASDAQ:ATVI) notched a 3.22% boost, while chip maker Advanced Micro Devices (NASDAQ:AMD) shot up nearly 12% after the announcement.Source: Google Stadia has the potential to be a game changer (no pun intended) but the real winners in the short term are going to be the companies that Google needs to lean on to make its game streaming platform happen. Googles Announces Stadia "The Future of Gaming"Leading up to yesterday's Game Developer Conference keynote, we had a pretty good idea of what Google was up to. After all, the company had publicly trialled the experience of playing AAA video games in a browser with its Project Stream, which wrapped up earlier this year.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 5 of the Best Stocks to Buy Under $10 Google's keynote was all about what it has been describing as "the future of gaming," which now has a name and a launch timeframe. Stadia is the official name of Google's new game streaming platform, and the company says it will launch later in 2019 in the U.S., Canada and Europe.Stadia will let players stream video games over the internet to devices running the Chrome web browser, through a Google Chromecast or to a Google Pixel device. No console or gaming PC is required, which would cut costs considerably for players. The company is also releasing a Stadia game controller that links to the service directly over Wi-Fi, and has buttons dedicated to YouTube and Google Assistant. Speaking of Youtube, Google says you'll be able to watch gameplay on its popular video-sharing service, push a button and instantly be able to play the video game.Stadia will require a 25Mbps internet connection and promises 4K resolution at 60fps, with plans to eventually offer up to 8K resolution and up to 120fps. WinnersThe global video game industry was worth $138 billion last year, and it's growing. If Stadia can grab a chunk of that, there is a real payoff for Google, which is why Alphabet stock nudged up 1.17% on the announcement. There is also the potential for game developers to sell to a wider audience, and Google says over 100 game studios already have Stadia development kits. Some game development companies got a serious boost from the Stadia announcement, including Activision Blizzard. Ubisoft Entertainment (OTCMKTS:UBSFY) -- the publisher of Assassin's Creed Odyssey, which was the game tested with Project Stream -- also saw a 2.99% bump.The big winner for now though is AMD. To launch Stadia, Google says it is investing in custom GPUs from AMD for its data centers. That's a big, exclusive hardware sale with the potential to keep going well beyond the launch. LosersWhile some game developer stocks saw a boost from Google's announcement, there is also uncertainty in the industry. Google is creating its own game studio to release Stadia-exclusive titles and that means competition. Developing for yet another platform means additional costs. Some video game console makers also took a hit. Microsoft (NASDAQ:MSFT) held steady, but Sony (NYSE:SNE) and Nintendo (OTCMKTS:NTDOY) both closed down over 3%. GameStop (NYSE:GME) has a lot to lose if gaming ditches physical discs for streaming, and it took a 0.99% hit on the day. * 7 Invincible Stocks Leading The Bull Market Higher What was missing from Google's Stadia announcement? Besides Doom Eternal -- which will also be available for PC, Xbox One and Nintendo Switch -- details on launch titles were thin. Also missing was the cost. We're assuming Google will charge a monthly subscription fee for access to Stadia, and that the optional controller would be sold separately, but there has been no confirmation. What we know now is that Google is angling for a larger cut of the $138 billion video game industry, in a big move that may have significant upside for Alphabet stock. In the meantime, Stadia partners like AMD are reaping the benefits as Google spends to build out the service, while console makers and game sellers watch to see if their business faces a real threat.As of this writing, Brad Moon did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Invincible Stocks Leading The Bull Market Higher * 5 Dow Jones Stocks Coming to Life * 7 of the Best High-Yield Funds for 2019 and Beyond Compare Brokers The post AMD Stock Rockets on Google Stadia Announcement appeared first on InvestorPlace.
Stadia, Google’s latest gadget, will allow people to play games without paying hundreds of dollars for consoles and computers, the company announced on Tuesday. All of the rendering will be hosted on the cloud.
Japan's Nikkei eked out small gains on Wednesday as investors awaited the outcome of a Federal Reserve policy review, while Sony and Nintendo tumbled on news that Google is starting a gaming business. Traders said investors remained cautious before the Fed's policy decision, with many expecting the central bank to reaffirm its dovish stance.
Shares of Japanese video gaming heavyweights Nintendo and Sony tumbled on Wednesday following Google's announcement on Tuesday that it was entering the sector through its streaming platform, Stadia.
Nintendo dropped as much as 4.6 percent and Sony declined 4.5 percent Wednesday, the biggest intraday drop for both stocks in six weeks. Stadia lets developers put games on a streaming platform that will allow players to access the action through the web, skipping expensive consoles or personal computers, Google announced at the Game Developers Conference in San Francisco.
Alphabet's (GOOGL) Google is likely to intensify gaming competition with its to-be-announced cost-effective game streaming service at GDC.
Esports, mobile gaming, subscription models, streaming services and significant penetration into the Chinese market will act as catalysts for gaming stocks over the long haul.
Should investors consider buying Microsoft (MSFT) stock at new all-time high as the company expands its cloud computing and IoT businesses, while maintaining its influence over the personal computer market?
The past six months have been tough ones for video-game stocks like Take-Two Interactive Software (NASDAQ:TTWO) and Activision Blizzard (NASDAQ:ATVI).Source: Via RockstarActivision shares are off nearly 50% from their September peak, while Take-Two stock is down about 35% during the same time period. Electronic Arts (NASDAQ:EA) has lost nearly a third of its value even after rebounding strongly from December's lows. * 7 Small-Cap Stocks That Make the Grade And to be fair, much of the stocks' plunge was deserved. Most of these names were overextended by the middle of last year, and investors were shocked to see just how easily the free online game Fortnite came out of nowhere and was so disruptive to the status quo.InvestorPlace - Stock Market News, Stock Advice & Trading TipsEverything about the video-game market is fluid, though, including its stocks. This dip, however, is an opportunity to step into the smallest but arguably the best-of-breed in the business… Take-Two stock. TTWO Wins the Console Loyalty WarsTake-Two is the name behind hits like Red Dead Redemption and the Grand Theft Auto series. Although its Grand Theft Auto franchise is the most successful video-game series ever in terms of revenue, TTWO has developed many fewer games than rivals like EA and Activision.TTWO also produces distinctly different kinds of game that may be counterintuitive on the surface. However, they are great money makers.Contrary to popular belief, gaming consoles like Microsoft's (NASDAQ:MSFT) Xbox and PlayStation from Sony (NYSE:SNE) are still a big deal. Although it is true that PC gaming is growing, console-play is also still growing, and its rising tide is lifting all boats.The industry's response to the expansion of the PC-games market has largely been to attempt to be all things to all people. EA now offers subscription-based access to PC-only games via its Origin Access program, while Microsoft now enables subscribers to its Game Pass service to access PC-based games.TTWO has tiptoed down the same path too, although not as much as its competitors. Over the course of the past three quarters, 85% of its revenue came from console players.It's a detail some investors find interesting, if not outright concerning. There's a method to Take-Two's madness, though.Rather than spreading its wings too far, the company has thus far focused on what it knows it does best: making great console games.A PC version of Grand Theft Auto V was eventually released, but it wasn't a priority. Meanwhile, although there are rumors that a PC version of Red Dead Redemption 2 will be released, it also doesn't appear to be a priority for the company.The strategy is effective and positive for Take-Two stock, even if it ultimately limits the company's top line. Staying in the Good Graces of GamersMost investors who aren't avid video-game players may not realize it, but regular players will readily recognize another not-so-subtle shift in the gaming business: the advent of in-game purchases called microtransactions. The latter phenomenon has grown from being a fun and easy way to enhance game-play for a couple bucks to a full-blown profit center in and of itself.The matter reached a fever-pitched frenzy in late-2017, after EA launched a new game. Gamers quickly learned the hard way that to be able to use some of the coolest weaponry or play as some of the coolest characters required either a massive amount of playing time or $80. That's more than buying the game cost.In-game purchases haven't gone away since then. Although most game developers have pushed them less aggressively recently, they're still a problem. The industry hasn't yet seemed to figure out what's fair when it comes to in-game purchases and where gamers draw the line.Take-Two has exercised considerably more restraint than its rivals have, however. Through the first nine months of the recently-ended fiscal year, only about one-third of the company's revenue came from what TTWO described as "recurrent consumer spending." The other two-thirds was driven by selling games.For perspective, a year ago Activision Blizzard reported that it had taken in more money from microtransactions than it did from actually selling video games.Many players claim they don't like the new normal, and some vowed to boycott EA in response to what they saw as its overly aggressive microtransaction tactics. But most complainers never follow through on their promises.On the flip side, it's also quite likely that many gamers haven't complained -- vocally -- at all, yet gravitate toward games like Take-Two's that don't cost quite so much to make the most of and are seen as a much better value. If that's the case, it's certainly a positive attribute for Take-Two and Take-Two stockTTWO CEO Strauss Zelnick has made a point of advancing the microtransaction minimization strategy explaining last year "Are you a monetization company or are you an entertainment company? We're an entertainment company and when we get that right, everything else flows from it." The Bottom Line on Take-Two StockWhile TTWO has worked its way into the upper echelon of game-publishing outfits by being the least typical company in the business, it's not bulletproof. It suffers the same cyclical swings that its rivals and console technologies do. The recent selloff of Take-Two stock illustrates that point.Nevertheless, Take-Two seems to fare better against headwinds than its rivals, and Take-Two stock bounces back better than the shares of its rivals do when disruptions like Fortnite come down the pike.Not every investor has to own Take-Two stock. But for investors who have to own a video-gaming name, Take-Two stock is an easy name to buy and just let simmer. It's even easier to buy TTWO stock on a dip like the one it just experienced.As of this writing, James Brumley did not hold a position in any of the aforementioned securities. You can learn more about James at his site, jamesbrumley.com, or follow him on Twitter, at @jbrumley. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 5 of the Best Stocks to Buy Under $10 * 7 Single-Digit P/E Stocks With Massive Upside * 7 Best Quantum Computing Stocks Trading Today Compare Brokers The post 2 Reasons Take-Two Stock Is the Easy Pick to Own in the Video-Game Business appeared first on InvestorPlace.
[Editor's note: This story was previously published in February 2019. It has since been updated and republished.]Overall, the stock market has made a huge improvement at the start of 2019 from where it ended in 2018; it has been a complete turnaround from last year's drop, when stocks entered bear-market territory.But even though many stocks have completely erased all of their losses and made it back into the green, not all stocks have done so well. What this means is that while there are still plenty of duds out there, there are also a few undervalued stocks to buy; it has just become a little trickier to find them amid all the flashy comeback stories.InvestorPlace - Stock Market News, Stock Advice & Trading TipsTo find the best stocks to invest in now,disciplined investors might start with their own watch list, which should contain "wish list" stocks that are usually too expensive or have been put there to be on the backburner for later. Among such stocks, companies that got left out of the rally are the most compelling. Even better, the best undervalued stocks to invest in are those that dropped by double-digit percentages during the current rally.Why is that?Markets that are pricing in the negative news typically lower the risk for investors. Such companies may work to resolve the business problem at hand, which improves its prospects and leads to a higher share price in the long run. As long as the bad news reported is a temporary setback and the business model is not broken, the risks behind buying a stock on a dip are lower. * 7 Winning High-Yield Dividend Stocks With Payouts Over 5% With all of that in mind, here are five undervalued stocks to invest in that aren't as scary as they seem. Sony (SNE)Investors expected more from Sony's (NYSE:SNE) earnings report when the company posted results on Feb. 1. Revenue of 2.4 trillion yen in the third-quarter missed estimates for 2.67 trillion yen.Adding salt to the wound, many SNE investors are fretting over Sony's weaker sales outlook, with smartphone and camera sales lagging. On the flipside, the PlayStation 4 business still could rebound. Even though the console cycle is many years old, customers will continue to buy new game titles. And in the smartphone space, a refresh in the second half of this year may give customers a reason to buy a new Sony device again.Sony is clearly not a broken company, so the stock's drop from $50 on Feb. 1 to $46 appears overdone. Trading less than 10% above its 52-week low and about 25% below its 52-week high, Sony stock clearly deserves its spot among the best undervalued stocks to consider now. Celestica (CLS)Celestica (NYSE:CLS) reported fourth-quarter revenue of $1.73 billion, up 10% from last year. Net earnings rose $46.5 million to $60.1 million, bringing in earnings of 44 cents a share. However, investors were unimpressed with the weak sequential revenue in its Communications, ATS and CCS segments, which were either flat or down. Still, revenue from all segments grew in the double digits from last year.Celestica ended the year with $422 million in cash and cash equivalents. Net cash fell $335 million for the year. And the balance sheet is not as strong as it could be, with non-IFRS debt leverage at 2.6X.The company supplies equipment in ATS -- aerospace and defense, industrial, smart energy, health tech and capital equipment. Its enterprise unit consists of servers and storage. Why then, should investors believe the company will offset the weakness it faces in the eroding semiconductor market?Celestica is cutting costs in operations to align the business with the lower revenue. It will continue to build its capital equipment business. Management believes the fundamentals in this space will only improve in the long run. As next-generation adoption in display continues, its OLED business, for example, will add to its bottom line.Celestica stock is an undervalued play worth considering. Allergan (AGN)Generic drug supplier Allergan (NYSE:AGN) fell over 10% in late January and early February for two reasons. First, its fourth-quarter earnings report did not please investors. Operating income sank 11.8% year-over-year, and revenue fell 5.8% YoY to $4.08 billion.On Feb. 1, the Food and Drug Administration approved Evolus' (NASDAQ:EOLS) Jeuveau. This product competes directly with Allergan's Botox. Pricing could come in at 20% below that of Botox, putting pressure on Allergan's bottom line.Be warned: it's likely that AGN stock will continue to sell off as investors price in the worst case scenario for Botox. Even though management already expects some pricing erosion, it is confident that the sales volume will taper off slowly. But this is good news for investors in search of a bargain, as the more the stock falls, the more discount value investors get on AGN stock.As Allergan launches new products this year, it will offset the negative impact of generic drug competition for Botox, making it an undervalued stock to watch. Innoviva (INVA)Innoviva (NASDAQ:INVA) is another stock in the drug space whose large drop starting in late January appears greatly overdone. The market all but erased the powerful uptrend in the stock that began after INVA sold off in November 2018 and bottomed at $14.The FDA approved Mylan's (NASDAQ:MYL) generic version of Advair, which GlaxoSmithKline (NYSE:GSK) produces. This forced investors to worry about Innoviva's prospects because the company is paid royalties from Glaxo. In the third quarter, Innova received $65.1 million in royalty revenues from Glaxo; $51.7 million came from global net sales of Revar/Breo Ellipta.On Feb. 6, Innoviva reported revenue of $79.86 million, up 14.9% from last year. With the stock trading at a forward price-to-earnings ratio of 7.7, the price-earnings-to-growth ratio is 0.39. As such, this general pessimism has created an appealing entry point to INVA stock. * 7 Winning High-Yield Dividend Stocks With Payouts Over 5% Investors appear to be overreacting to the generic competition. If demand for Innoviva's formulation does not drop and prices hold, royalty revenues should not fall as much as markets think, which makes INVA an ideal undervalued stock to invest in now. Vodafone (VOD)Telecom stocks are out of favor. For example, just look at AT&T (NYSE:T), which is down over 20% from its 52-week high. But Vodafone (NASDAQ: VOD) is down the most among the major names in the sector, falling over 40% from its 52-week high.Third-quarter results for VOD, which ended on Dec. 31, missed analysts' consensus sales forecasts. Vodafone continued to under-perform in Europe, due to rising competition. Although the company highlighted improving customer trends in Italy, Germany, and reduced churn in Spain, this was not enough to prevent revenue falling 5.6% in Europe and 6.8% overall.With all that bad news, it is little wonder why the stock has been marching lower. But VOD still has ways to mend the wound. The company could trim the dividend and re-allocate its resources toward advertising and capital expenditures. That would put it in a better position to compete with its European counterparts. And the stock would respond if those efforts lead to better revenue numbers.Vodafone shares pay a dividend yield in excess of 6%. If Vodafone grows its U.K. business as it signs on users to its 5G services and cuts costs as it signs on more customers, VOD stock will finally move higher.As of this writing, Chris Lau owned shares of Innoviva. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 15 Stocks Sitting on Huge Piles of Cash * The 10 Best Stocks to Buy for the Bull Market's Anniversary * 7 Dividend Stocks With Big Yields Compare Brokers The post 5 Undervalued Stocks to Invest In appeared first on InvestorPlace.
BARRONS NEXT HOT STOCKS Shares of videogame publisher (TTWO) (TTWO) were down more than 3% in Thursday trading as buyout rumors that had pulled the stock upward cooled off. Take-Two stock booked a nearly 7% rise yesterday on reports that (6758) (SNE) was looking at a bid for the company.
The revelation that Facebook data deals with big tech companies are the subject of a criminal investigation could intensify pressure on the social network as it faces fallout from multiple privacy scandals.
Although I've helped InvestorPlace readers successfully navigate Roku (NASDAQ:ROKU), I still find shares difficult to decipher. Less than a year-and-a-half has passed since the company's initial public offering, yet the ROKU stock price traveled all over the map.Source: Shutterstock The trailing six months provide a telling example of the volatility you can expect with the streaming-TV equipment provider. From an all-time record high in October last year to a devastating multi-year low less than 90 days later, ROKU stock at least keeps traders busy, and employed.However, some analysts believe that the choppiness may soon fade. With Apple (NASDAQ:AAPL) probably on the verge of announcing its video-streaming service, it has added incentive to market Airplay 2. A proprietary system, Airplay facilitates audio or video streaming from an Apple product to a different device.InvestorPlace - Stock Market News, Stock Advice & Trading TipsThe second iteration of this technology expands this capacity to include several non-Apple brands, such as Samsung and Sony (NYSE:SNE). But Roku was left out in the cold. Of course, as a comparative minnow, losing such a high-profile partnership levered an exponential impact. Unsurprisingly, the ROKU stock price took it on the chin. * 5 of the Best Stocks to Buy Under $10 But with Apple needing to establish credibility in the content space, a partnership with ROKU makes sense. Recent rumors indicate that the two companies are on the verge of inking a deal. If so, Roku-armed T.V.'s can stream content via an iPhone, iPad or Mac computer, generating an instant value-add.On the surface level, this is the type of fundamental driver that should sustainably and consistently drive the ROKU stock price. But after gaining 4% on the news, shares have more than given up that burst of profitability. How then should investors proceed? Apple Streaming Is No Panacea for ROKU stockIn my last write-up about Roku, I had confidence that a strong showing for its fourth-quarter fiscal 2018 earnings report could spike shares. We got exactly that, and like clockwork, the streaming-equipment provider launched into low-earth orbit.At the same time, I urged readers not to chase the ROKU stock price. Shares had already gone berserk prior to the Q4 report. After management disclosed their earnings beat, the company became even more of a unicorn. Year-to-date, the upstart streamer has skyrocketed over 137%.Unfortunately, unicorns aren't real. While the fundamentals support ROKU stock -- the company's user base has increased dramatically and productively -- we've seen this before. I worry that the good news has been priced in. That means shares are rising based largely on emotion, such as the "fear of missing out," or FOMO.I'm going to stick with my last assessment: I encourage you to miss out, at least at this price point.Primarily, I don't see Apple's streaming overtures as a panacea for Roku. For one thing, Android operating systems dominate mobile market share. Therefore, you're talking about a necessarily limited market for Apple. From Roku's perspective, they need to expand in total numbers, and not just with revenue-per-user.Plus, Apple doesn't really offer anything compelling or groundbreaking with its newfound original-content venture. Although it has aggressively courted executive, acting and directing talent to kickstart their entertainment enterprise, they're way behind the curve.Of course, Apple being Apple, they're likely to throw their vast riches into the content and streaming space. But even then, I go back to my original concern about Roku: nothing new or exciting exists to justify the excess in the ROKU stock price. * The 10 Best Stocks to Buy for the Bull Market's Anniversary As a result, I'd rather stay on the sidelines until a better opportunity arises. Don't Feed Your EmotionsIf you take a look at Roku's long-term chart, you'll unmistakably recognize a pattern of sharp peaks and valleys. You don't have to be a technical analyst -- or even believe in the technical approach -- to recognize that this is an emotional stock.Specifically regarding Apple and the Airplay deal, Roku dropped nearly double digits on a single day when Apple apparently snubbed the streaming company. Later, it jumped significantly when AAPL relented, only to give up those gains 24 hours later.Clearly, this isn't about Airplay. Instead, most of the markets are reacting emotionally to any noteworthy news or even rumors. Don't get me wrong: I think ROKU has serious upside potential. It just needs a reality check before it gets there.As of this writing, Josh Enomoto was long SNE. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 15 Stocks Sitting on Huge Piles of Cash * The 10 Best Stocks to Buy for the Bull Market's Anniversary * 7 Dividend Stocks With Big Yields Compare Brokers The post Appleas Streaming Venture Is a Distraction for Roku Stock appeared first on InvestorPlace.
Nintendo (OTCMKTS:NTDOY) stock continues to fall. The sales growth of its Switch console and many of its games would seem to help the company. Still, Nintendo stock has failed to gain traction and now appears positioned to fall back to 52-week lows. NTDOY stock trades at an attractive valuation and follows a strategy that can bolster its long-term success. However, due to lagging sales in the overall sector, Nintendo stock remains a victim of its industry. * 15 Stocks Sitting on Huge Piles of Cash Nintendo Will Bring Virtual Reality to SwitchSource: Shutterstock Nintendo just announced the creation of a virtual reality (VR) headset for its popular Switch console. The company will release this headset on April 12. This cardboard headset will cost $80, and it comes with an alien shooter game. This is the company's first crack at VR since it released the Virtual Boy in 1995. This comes in much less than the $300 VR headset Sony (NYSE:SNE) released for its PlayStation gaming console. The interesting thing about the VR headset is it reaffirms Nintendo's commitment to consoles. While it produces smartphone-based games, Nintendo designs them to spark interest in console games. The company has even gone so far as to discourage partners from charging customers excessive fees to speed up gameplay or win special characters on its smartphone games. Console Strategy Makes SenseAdmittedly, the company's strategy seems like a negative for Nintendo stock at first glance. Players will sometimes spend hundreds or even thousands of dollars on such upgrades. Discouraging some of these fees appears to sabotage a lucrative revenue stream.InvestorPlace - Stock Market News, Stock Advice & Trading TipsAlso, as viewing has diversified away from televisions, video game console sales have steadily declined since the early 2000s. Recreational game players tend to gravitate toward devices. On the other end, competitive players prefer PC-based gaming for its speed. Hence, a commitment to consoles seems counterintuitive.However, Nintendo's console connects to tablet consoles just as easily as to a television. This makes it both portable and conducive to multi-user play. Also, tablet compatibility increases the likelihood consumers will buy more than one Switch per household. This can compensate for the revenue lost from charging fewer fees on smartphone-based games. Strategy Will Help Nintendo StockI think Nintendo has made a wise decision by questioning the fee for play strategies that drive many gaming companies. If the airline industry serves as an indicator, excessive fees charged by airlines other than Southwest (NYSE:LUV) have stoked resentment. Avoiding the "fee for everything" approach has not hurt Southwest stock. I do not think it will hamper Nintendo stock either.Sales figures also appear to validate this strategy. In January, videogame sales fell 19% on a year-over-year basis. The Nintendo Switch was the only platform to see growth amid the decline.Also, Nintendo currently sells three of the ten best-selling games. Only Take-Two (NASDAQ:TTWO) currently matches this feat. Drawing on long-time franchises has helped. InvestorPlace contributor Bret Kenwell considers Nintendo the Disney (NYSE:DIS) of the video game industry, as it has kept franchises such as Mario Bros. popular for decades. When Is the Right Time to Buy Nintendo Stock?So, where does that leave Nintendo stock? The 23 price-to-earnings (PE) ratio comes in well below historical averages. Yes, both Activision Blizzard (NASDAQ:ATVI) and Electronic Arts (NASDAQ:EA) support slightly lower multiples. Still, I like the innovation I see from Nintendo, so I do not think this valuation should discourage buyers.The only reason I see not to buy NTDOY stock right now pertains to the direction of the Nintendo stock price. The equity has traded in a range over the last few months. It fell to a 52-week low of $31.38 per share on Christmas Eve. It then rose above $39 per share in January before falling back. Today, it trades at just above $33 per share. * 10 National Pi Day Deals to Grab on 3.14 As sales declines have hit the entire industry, NTDOY has fallen along with other gaming stocks. Until we know the Nintendo stock has established a firm bottom, I do not recommend buying. However, the new VR headset should help revenues and conditions for an eventual recovery remain in place. Once it begins to trend upward, I think Nintendo can reach and surpass its $57.96 per share high.As of this writing, Will Healy did not hold a position in any of the aforementioned stocks. You can follow Will on Twitter at @HealyWriting. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 5 of the Best Stocks to Buy Under $10 * 7 Retail Stocks Winning in 2019 and Beyond * The 10 Best Stocks to Buy for the Bull Market's Anniversary Compare Brokers The post To Move Higher, Nintendo Stock Needs Only a Switcha¦ in Direction appeared first on InvestorPlace.
According to GuruFocus' top 10 holdings data, Mario Gabelli (Trades, Portfolio)'s top five holdings as of year-end 2018 were The Madison Square Garden Co. (MSG), Sony Corp. (SNE), Bank of New York Mellon Corp. (BK), Ryman Hospitality Properties Inc. (RHP) and Twenty-First Century Fox Inc. (FOX). Warning! GuruFocus has detected 5 Warning Signs with PWOD. With the goal of generating long-term capital appreciation, the guru's New York-based firm, GAMCO Investors, looks for investment opportunities among undervalued companies that have a catalyst.