"Game On" is The Fly's weekly recap of the stories powering up or beating down video game stocks.
NEW RELEASES: This week's major release is "Super Mario 3D All-Stars," a collection of older games in the "Mario" franchise. The game launches September 18 as part of a limited release exclusively on the Nintendo Switch (NTDOY). Also out this week is Take-Two's (TTWO) "WWE 2K Battlegrounds," a professional wrestling sim out on September 18 for PC, Switch, PlayStation 4 (SNE), Xbox One (MSFT), and Google Stadia (GOOG).
XBOX SERIES X: Following the confirmation of the existence of the Xbox Series S, out November 10 at a suggested retail price of $299, Microsoft confirmed that the Xbox Series X, which is more powerful than the Series S and includes a disc drive, will also be out on November 10 at a suggested retail price of $499. The company noted in its announcement that it is offering the console at $34.99 per month for 24 months with Xbox All Access, which includes 24 months of Xbox Game Pass Ultimate, its game subscription service. The same day, Microsoft said that Game Pass Ultimate members will have access to EA Play, Electronic Arts' (EA) gaming subscription service, at no additional cost starting this holiday season.
Commenting on the announcements, Max Cherney wrote in last week's edition of Barron's that Microsoft is "breaking new ground" by merging hardware and software, saying that the Series X could be a "game changer." Cherney added that while Microsoft's video game business is small compared with Office 365 and its Azure cloud offerings, its new Xbox strategy is a key part of the value proposition for consumers and investors.
APP STORE: Late last week, CNBC reported that Apple (AAPL) had revised its App Store guidelines ahead of the release of iOS 14, which is expected later in September, with one major revision relating to game streaming services. The tech giant said in its revised guidelines that services such as Google Stadia and Microsoft xCloud are explicitly permitted, though under the condition that games offered in the service must be downloaded directly from the App Store, not from an all-in-one app.
Following the news, Microsoft told Kotaku in a statement: "This remains a bad experience for customers. Gamers want to jump directly into a game from their curated catalog within one app just like they do with movies or songs, and not be forced to download over 100 apps to play individual games from the cloud. We're committed to putting gamers at the center of everything we do, and providing a great experience is core to that mission."
PS5 OUTPUT CUT: Sony has slashed production of its upcoming PlayStation 5 console for this fiscal year by 4M units to about 11M, following production issues with its custom-designed SOC for the new console, according to Bloomberg's Takashi Mochizuki and Debby Wu. The company increased orders with suppliers in July in anticipation of the increased demand for gaming in the holiday season and beyond, but sources told Bloomberg that the manufacturing issues have cut into its ability to produce as many consoles as it wants.
OTHER STORIES TO WATCH:
At its UbiForward event last week, Ubisoft (UBSFY) announced that a full remake of "Prince of Persia: The Sands of Time" will be coming to PS4, Xbox One, and PC on January 21, 2021.
Last Tuesday, Axios reported that Apple is countersuing "Fortnite" creator Epic Games, arguing that the company breached its contract with Apple and is violating California laws against unfair competition. Investors in Epic include Tencent (TCEHY), KKR (KKR), Disney (DIS), and Sony (SNE).
Yesterday, Microsoft unveiled the initial launch line-up of more than 150 games that Xbox Game Pass Ultimate members can play via xCloud, the company's cloud gaming service, starting September 15 at no additional cost.
Nintendo has once again requested its assembly partners increase production of its Switch console, increasing its target to as many as 30M units for fiscal 2020, Bloomberg reported last week.
GameStop (GME) reported downbeat second quarter results last Wednesday, with comparable store sales declining 12.7% year-over-year in the quarter. Of note, the company reported an 800% boost in global e-commerce sales in Q2.