"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 psychological horror game "The Medium," which is developed and published by "Layers of Fear" developer Bloober Team. The game will release on January 28 for PC and Xbox Series X/S (MSFT).
GAMESTOP VOLATILITY: GameStop (GME) shares have been highly volatile over the past few sessions, with the shares closing at an all time high of $65 yesterday after peaking at $159 earlier in the session. The volatility started to pick up steam last week, as shortseller Citron Research tweeted last Tuesday that the stock will trade "back to $20 fast." Later in the week, GameStop went on an incredible rally, with Citron's Andrew Left saying he will no longer comment on the stock after an "angry mob" committed "multiple crimes." Left added that what "Citron has experienced in the past 48 hours is nothing short of shameful and a sad commentary on the state of the investment community" after an "angry mob who owns this stock has spent the past 48 hours committing multiple crimes" that Left said he will be "turning over to the FBI, SEC and other governmental agencies." Bloomberg had noted around that time that the video game retailer's stock was the most actively traded U.S. company at one point "as an army of Reddit-charged day traders" pushed up the volatility and the share price.
On Monday, however, the stock continued to surge before slipping back down to $65, with Tesley Advisory analyst Joseph Feldman double downgrading GameStop to Underperform, saying he sees a "disconnect" between the company's fundamentals and its valuation following the recent surge. Feldman added that he believes the stock's rally is likely being driven by a short squeeze and speculation by retail investors on forecasts for the new gaming cycle and the involvement of activist RC Ventures. Meanwhile, Loop Capital analyst Anthony Chukumba said on CNBC on Monday that GameStop is "Blockbuster all over again," adding that the stock price has become "disconnected" from the retailer's fundamentals.
The saga continued Tuesday morning, as GameStop shares were halted for volatility after rising 16%, with Social Capital chairman Chamath Palihapitiya disclosed on Twitter that he had purchased $115 calls on GameStop. After resuming trade, GameStop shares skyrocketed again, reaching over $90 a share.
XBOX LIVE GOLD: On Friday, Microsoft announced that it will be making price adjustments for Xbox Live Gold, its online play subscription service, in select markets. The company said that, going forward, new pricing for the online service will be 1-month for $10.99, 3-months for $29.99, and 6-months for $59.99, or one's local market equivalent. The compares to the previous prices of 1-month for $9.99, $24.99 for three months, $39.99 for six months, and $59.99 for a full year. The Fly notes that Xbox Game Pass Ultimate, the company's video game subscription service, includes a subscription to Xbox Live Gold at no additional cost.
Following backlash from users, many of whom do not wish to upgrade to Xbox Game Pass Ultimate, Microsoft said via Twitter that it "missed the mark" with the announcement, and that it will be reversing its Xbox Live Gold pricing updates. In addition, the company said it would remove Gold requirements for free-to-play games and continue to offer Xbox Live Gold in the U.S. at its previous pricing options.
OTHER STORIES TO WATCH:
GameStop
+12.45 (+16.21%)
Microsoft
+3.29 (+1.43%)
Nintendo
+ (+0.00%)
Symbol now SONY
+0.48 (+0.48%)
acquired by MSFT
-0.58 (-0.62%)
Take-Two
-2.36 (-1.16%)
Electronic Arts
+0.07 (+0.05%)
Capcom
+ (+0.00%)
Ubisoft
+ (+0.00%)
Tencent
+ (+0.00%)
Roblox
+ (+0.00%)