SuperData says digital games earned $126.6B last year
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SUPERDATA: Last week, SuperData, a Nielsen company, released its 2020 Year in Review report focusing on the health of digital games and interactive media market, the impact of COVID-19 on games and brands, and likely gaming trends in 2021. The report noted that 55% of people played video games during the first phase of coronavirus lockdowns. Overall, digital games alone earned $126.6B in 2020, up 12% year-over-year in a year where audiences were forced to stay home and interact remotely. Free-to-play games continued to generate the vast majority of games revenue, with Asian markets accounting for 59% of free-to-play earnings. The mobile market experienced 10% growth in 2020 and accounted for 58% of the total games market.
"Roblox" (RBLX) was the third highest-earning digital game of 2020 and surpassed Epic's "Fortnite" thanks to strong mobile growth. "Roblox" mobile earnings grew as the game creation platform became a social network of choice for young gamers. Although "Fortnite" still earned more than $1B in 2020, it faced stiff competition from games like "Roblox" and Activision's (ATVI) "Call of Duty: Warzone." Premium games earnings grew 28% year-over-year, outpacing the growth of the free-to-play market. Meanwhile, gaming video content became a $9.3B industry in 2020, reaching 1.2B viewers, and virtual reality and augmented reality earned $6.7B in 2020 as VR game earnings jumped 25% year-over-year to $589M in 2020, according to SuperData. Investors in Epic include Tencent (TCEHY), KKR (KKR), Disney (DIS), and Sony (SNE).
ROBLOX: Video game company Roblox Corporation, which is behind the popular "Roblox" game, said in a regulatory filing late lats week that has filed a prospectus relating to registration of the resale of up to 196,711,321 shares of its Class A common stock by its stockholders identified in this prospectus, referred to as the registered stockholders. Unlike an initial public offering, the resale by the registered stockholders is not being underwritten by any investment bank. Based on information provided by the NYSE, the opening public price of Roblox's common stock on the NYSE will be determined by buy and sell orders collected by the NYSE from broker-dealers. Based on such orders, the designated market maker will determine an opening price for its Class A common stock in consultation with our financial advisors pursuant to applicable NYSE rules. The company has been approved to list its Class A common stock on the NYSE under the symbol "RBLX." Roblox expects its Class A common stock to begin trading in February 2021.
The move came two days after the company said that it raised $520M in new Series H funding at a purchase price of $45 per share led by Altimeter Capital and Dragoneer Investment Group. The Investment Group of Santa Barbara and Warner Music Group, along with several current investors, also participated in this round. The Series H funding values the company at $29.5B, the company said.
GAMESTOP: On Monday, GameStop (GME) announced that it entered into an agreement with RC Ventures, one of the company's biggest shareholders. The agreement provides for the immediate appointment of three new directors – Alan Attal, Ryan Cohen and Jim Grube – who will also stand for election on GameStop’s nine-member slate at the company’s 2021 Annual Meeting of Stockholders, which is expected to take place in June 2021. Effective immediately and through the Annual Meeting, GameStop’s board of directors will expand from 10 members to 13 members. Lizabeth Dunn, Raul Fernandez, James K. Symancyk and Kathy Vrabeck have each informed the board that they do not intend to stand for reelection at the Annual Meeting. As such, the board will be reduced to nine members following the Annual Meeting. GameStop’s agreement with RC Ventures includes customary standstill and voting provisions.
Additionally, the gaming retailer reported sales results for the nine-week holiday period ended January 2, 2021. The company reported a 4.8% boost in comparable sales and a 309% increase in E-Commerce sales for the period. Total holiday sales fell 3.1% year-over-year, driven by an 11% decrease in GameStop's store base due to its planned de-densification strategy, temporary store closures around the world due to government mandates and lower store traffic, particularly later in December, due to the significant impacts of COVID-19. Looking ahead, the company said it expects positive comparable sales results and profitability in the fourth quarter.
OTHER STORIES TO WATCH:
Epic Games said in a blog post last week that it has has acquired the technology and business of RAD Game Tools, a video game software development company whose products and technology appear in close to 25,000 games.
Microsoft's (MSFT) Mojang announced that it will end support for its mobile augmented reality game "Minecraft Earth" in June 2021.
Disney's Lucasfilm announced that Lucasfilm Games is now the official name for all gaming titles from Lucasfilm, which includes games in the "Star Wars" and "Indiana Jones" franchises.