NEW RELEASES: Among this week's new releases is Microsoft's (MSFT) "Crackdown 3," an open world action game that launches exclusively for Xbox One and Microsoft Windows on February 15. Also out this week is Ubisoft (UBSFY) shooter "Far Cry: New Dawn," which rolls out Friday for Xbox One, PC, and PlayStation 4 (SNE). In addition, "Civilization VI: Gathering Storm," an expansion for Take-Two's (TTWO) strategy game "Civilization VI," releases February 14 on PC.
EA, TAKE-TWO EARNINGS: Last week, two of the "big three" game publishers reported quarterly results. Electronic Arts (EA) reported lower than expected third quarter earnings and net bookings and cut its net bookings view for fiscal 2019. The company also provided downbeat guidance for the fourth quarter. EA attributed the earnings miss to weaker than expected unit sales of "Battlefield V" and the low number of installs of "Command & Conquer: Rivals." Of note, the company said on its quarterly call that it was "very pleased" with the recent demos for upcoming live services game "Anthem" and that it has "big plans" for battle royale shooter "Apex Legends," which launched a day before the game maker reported earnings.
Meanwhile, Take-Two reported a GAAP earnings miss for Q3 but a beat on net bookings for the quarter. The company attributed the "better-than-expected results" to the "record-breaking launch" of its latest game "Red Dead Redemption 2," which it said has sold over 23M units worldwide. The game maker also provided lower-than-expected guidance for Q4 and FY19.
APEX LEGENDS: Earnings have only been part of the story for EA over the past week, as its free-to-play battle royale game "Apex Legends," which was made by "Titanfall" developer Respawn Entertainment," continues to grow in popularity. Following the game's announcement and launch last Monday, Respawn has made several announcements about the title's rapidly growing playerbase, saying it reached 10M players in just its first three days. The developer said last night that more than 25M players have played "Apex Legends" and that over its first weekend it had "well over" 2M concurrent players at its peak. Following that announcement, Baird analyst Colin Sebastian raised his price target on EA to $106 from $90 and kept his Outperform rating, saying that the launch implies a better start than Epic Games's "Fortnite," which took over 40 days to reach 25M users. Continuing its rally, shares of EA are up 4.2% in afternoon trading. Investors in Epic Games include Tencent (TCEHY), KKR (KKR), and Disney (DIS).
ACTIVISION BLIZZARD LAYOFFS: Last week, Bloomberg's Christopher Palmeri reported that Activision Blizzard (ATVI) is set to cut "hundreds of jobs" this week in response to slowing sales. The job cuts, which will be announced on Tuesday, are part of the game publisher's restructuring plans, which are intended to centralize some of its functions, Palmeri said. Following the report, Benchmark analyst Mike Hickey cut his price target on Activision Blizzard to $68 from $87 ahead of Tuesday's earnings report, saying he remains cautious about near-term growth expectations given the uncertainty he sees around mobile and advertising performance contributions.
"Game On" is The Fly's weekly recap of the stories powering up or beating down video game stocks.
Microsoft
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Ubisoft
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Symbol now SONY
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Take-Two
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Capcom
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