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Video game publishers 'struggling' to keep up with innovation, says Oppenheimer. Oppenheimer analyst Andrew Uerkwitz tells investors in a research note that he believes the video game industry is "still healthy," but that the larger publishers -- primarily Outperform-rated Activision Blizzard (ATVI) and Electronic Arts (EA) -- are struggling to keep up with innovation and are not enjoying the same growth rates. He notes that Activision is expected to see just 4% growth in 2H18, while EA is down 5% y/y, while Take Two (TTWO) is estimated to be up about 69% for the same period due to Red Dead Redemption 2. He says EA has "several shots" on goal with three AAA titles coming in 2019, but says Activision has "a little work to do" on the Blizzard side.

Take-Two stands to benefit from Steam price cut, says Morgan Stanley. Morgan Stanley analyst Brian Nowak noted that Valve announced last week it was changing the take rate on its Steam PC-game distribution platform, reducing Steam's take rate to 20% from 30% on all sales over $50M per game. For any game that has achieved scale on Steam, this 10% increase to gross revenue will "effectively fall directly to the game's operating profit," said Nowak. He expects the impact to be minimal for Activision Blizzard (ATVI) and Electronic Arts (EA), who distribute most or all of their games through wholly-owned platforms, but said that for Take-Two (TTWO) the impact could be more significant. The lower platform fees could drive as much as 8% upside to his FY20 EPS estimate for Take-Two, noted Nowak, who maintains an Overweight rating and $150 price target on its shares.