"Game On" is The Fly's weekly recap of the stories powering up or beating down video game stocks.
NEW RELEASES: This week's big release is Blizzard's (ATVI) "Warcraft III: Reforged," a remastered version of the 2003 real-time strategy game "Warcraft III: Reign of Chaos." The new edition of the game launches today for PC and Mac.
ATVI/GOOGLE PARTNERSHIP: Last Friday, Activision Blizzard and Google (GOOGL) announced a multi-year strategic relationship to "power new player experiences." Under the terms of the relationship, Google Cloud will become the preferred provider for the game maker's game hosting infrastructure and YouTube will be its exclusive streaming partner worldwide, excluding China, for live broadcasts of its esports leagues and events -- including Overwatch League, Call of Duty League, Hearthstone Esports, and more. From now on, YouTube will host the official live broadcasts of the company's esports leagues and events including the newly created Call of Duty League, Overwatch League, Hearthstone Esports, and more.
PIPER ON 'BIG 3': Piper Sandler analyst Michael Olson raised his price target on the "big 3" U.S. gaming publishers on Tuesday, maintaining Overweight ratings on Activision Blizzard, Take-Two (TTWO), and Electronic Arts (EA) ahead of their earnings reports. Olson boosted Activision's target to $69 from $62, saying he sees potential for upside driven by "Call of Duty: Modern Warfare" as well as "Call of Duty Mobile." The analyst added that he anticipates the company's initial fiscal 2020 outlook to be below the Street, "as is typical" for the company. Meanwhile, Olson also raised his price target on Take-Two shares to $141 from $134, saying he expects the company's fiscal 2020 outlook to only be increased by the approximate amount of any December quarter reported upside. Additionally, the Piper analyst upped his EA price target to $124 from $106, saying he believes there is potential for a "modest uptick" in fiscal 2020 guidance given a strong launch for "Star Wars Jedi: Fallen Order" and monetization around "Apex Legends."
TARIFFS: On Monday, Polygon's Charlie Hall reported that the "Phase One" trade agreement recently signed by the U.S. and China removed the threat of higher prices for upcoming video game consoles such as the PlayStation 5 (SNE) and Xbox Series X (MSFT). The tariffs that U.S. President Donald Trump threatened to slap on Chinese goods last summer had the potential to raise the cost of the PS5 and Xbox Series X, which will likely be constructed in China this year for sale in the U.S. and abroad, Hall noted. The threat prompted solidarity among console manufacturers, as Sony, Nintendo (NTDOY), and Microsoft had signed a letter to the USTR decrying the proposed duties, according to Polygon. "USTR has suspended the tariffs on consoles until further notice," the Entertainment Software Association told Polygon last week via email. "We are encouraged that the Administration suspended the implementation of tariffs on video game consoles and controllers. These tariffs would have significant implications for our industry, which boasts a trade surplus for the American economy. Tariffs will erode innovation, decrease job opportunities for American workers, and increase prices for consumers."
OTHER STORIES TO WATCH:
Symbol now SONY
+0.645 (+0.90%)
Electronic Arts
+1.77 (+1.60%)
Take-Two
+2.65 (+2.15%)
Alphabet
+21.22 (+1.48%)
Alphabet
+21.34 (+1.49%)
acquired by MSFT
+1.48 (+2.54%)
Microsoft
+3.06 (+1.89%)
Nintendo
+ (+0.00%)
Tencent
+ (+0.00%)
Disney
+1.95 (+1.44%)
KKR
+0.315 (+1.04%)
Paradox Interactive
+ (+0.00%)