Welcome to "Game On," The Fly's weekly recap of the stories powering up or beating down video game stocks.
NINTENDO: On Tuesday, Nintendo (NTDOY) released its Switch system in China in partnership with Tencent (TCEHY). The system, which originally launched in March 2017 in most other regions, is currently available in China at a suggested retail price of RMB2,099. Several industry analysts told CNBC that the Switch could become the biggest console in China over the next few years, noting that the system faces challenges in a market that prefers free-to-play mobile games and may not move the needle for Nintendo's business in the near term. The release comes a week after Nintendo said that, over Thanksgiving week from November 24 to November 30, the Switch and Switch Lite systems sold a combined total of more than 830,000 units in the U.S. Shares of Nintendo are currently 2.2% higher in New York.
LOCKHART: Last week, Kotaku's Jason Schreier reported that Microsoft (MSFT) is working on a lower-cost, disc-less version of Scarlett, its next iteration of the Xbox that the company said in June would "set a new bar for console power, speed and performance." This particular iteration of Scarlett is currently code-named Lockhart, Schreier said. While Microsoft previously has said that Scarlett was a single, high-end console, Kotaku's Schreier has learned that Lockhart is still in the works as a cheaper, digital-only alternative to the new system.
SUNTRUST: On Monday, SunTrust analyst Matthew Thornton raised his price target on Electronic Arts (EA) to $113 from $107 and maintained his Buy rating. Thornton said he has the "highest confidence" in the game publisher's short-term revision trend among its gaming peers following a "very solid" Q2 and amid a favorable set of fundamentals that includes a shift to digital gaming, console upgrade cycle, improving revenue sharing in content distribution, and its balance sheet position. The analyst further cited potential catalysts for EA that include e-sports league development for its sports titles, the successful launch of "Apex Legends" on mobile and in China, and further M&A activity or licensing of new intellectual property.
Meanwhile, Thornton also raised his price target on Activision Blizzard (ATVI) to $61 from $59 and kept his Buy rating, saying that the game maker is positioned for a "best-among-peers" high single digit revenue growth and low-teen earnings growth over the next two years. The analyst said he also positive on the company's strong balance sheet and cash flow profile, adding that it has "executed well" recently with the success tally that includes "WoW Classic," "CoD Mobile," and "CoD Modern Warfare."
OTHER STORIES TO WATCH:
Nintendo
+ (+0.00%)
Tencent
+ (+0.00%)
Microsoft
+0.11 (+0.07%)
Electronic Arts
-0.01 (-0.01%)
acquired by MSFT
+0.97 (+1.78%)
Take-Two
+1.51 (+1.26%)
Symbol now SONY
+0.35 (+0.53%)
Capcom
+ (+0.00%)
Ubisoft
+ (+0.00%)