"Game On" is The Fly's weekly recap of the stories powering up or beating down video game stocks.
NPD HARDWARE: Late last week, NPD analyst Mat Piscatella said that April consumer spending across video game hardware, content and accessories declined 8% in the U.S. when compared to a year ago, to $4.3B. Hardware gains were unable to offset declines in content and accessories spending. Year-to-date spending is 8% lower than the same period a year ago, at $18.3B. The market has experienced 6 consecutive months of YoY declines, Piscatella noted.
Video game hardware dollar sales in April increased 16% when compared to a year ago, to $343M, due to improved supply of PlayStation 5 (SONY) and Xbox Series (MSFT) consoles. Year-to-date spending on hardware fell 9%, to $1.5B. The Nintendo Switch (NTDOY) featured the highest unit sales of any hardware platform for both April and 2022 year-to-date. Xbox Series ranked 2nd in units sold during both time periods. Lifetime unit sales of Nintendo Switch have now surpassed those of PlayStation 4, making it the 4th highest unit selling console in U.S. history, and the 6th highest unit selling video game hardware platform overall. In console it trails only PS2, Xbox 360 and Wii. PlayStation 5 led April in hardware dollar sales, trailed closely by Xbox Series and Nintendo Switch. Xbox Series has generated the highest hardware dollars of any platform year-to-date, followed by PlayStation 5 and Nintendo Switch.
NPD SOFTWARE: Additionally, NPD's Piscatella said that Warner Bros. Discovery's (WBD) "LEGO Star Wars: The Skywalker Saga" was the best-selling video game of April 2022, while also debuting as the #2 best-selling game of 2022 year-to-date. It was the best-selling game of the month across Nintendo, PlayStation, Xbox, and Steam platforms. "LEGO Star Wars: The Skywalker Saga" achieved the highest launch month dollar sales for any LEGO title in history, and after one month ranks among the top 6 best-selling LEGO games life-to-date. "LEGO Star Wars: The Skywalker Saga" is the first 3rd party game to rank as the best-selling title on Nintendo platforms since March 2021, when Capcom's (CCOEY) "Monster Hunter: Rise" came out. Bandai Namco's (NCBDY) "Elden Ring" was the 2nd best-selling title of April 2022. "Elden Ring" remains the best-selling game of 2022 year-to-date and has surpassed Activision's (ATVI) "Call of Duty: Vanguard" to become the best-selling premium game of the trailing 12-month period ending April 2022. Other top selling games in April in the U.S. include Sony's "MLB The Show 22," Nintendo's "Kirby and the Forgotten Land" and "Nintendo Switch Sports," and Sony's "Horizon Forbidden West."
TAKE-TWO RESULTS: Yesterday, Take-Two (TTWO) reported lower-than-expected GAAP earnings per share and net bookings for the fourth quarter, though noted that recurrent consumer spending in the period increased 1% year-over-year and accounted for 63% of total sales. The company said the biggest contributors to sales were "NBA 2K22," "NBA 2K21," "GTA Online," "Grand Theft Auto V," "Tiny Tina's Wonderlands," "Red Dead Redemption 2," "Red Dead Online," "WWE 2K22," "Top Eleven," and "Two Dots."
Looking ahead, the game maker guided for FY23 net bookings and GAAP EPS below consensus estimates, though CEO Strauss Zelnick said that the FY23 net bookings guidance range would be a new record for the metric on a standalone basis. "As we execute on our organic growth initiatives, while unlocking new opportunities presented by our pending transaction with Zynga (ZNGA), we believe that we can broaden our portfolio and capitalize further on new platforms, business models, emerging markets, and distribution channels," Zelnick added. "As we deliver on these growth drivers, we believe that Take-Two remains incredibly well-positioned to increase its scale and prominence in the industry, expand its margins, and deliver long-term value for our shareholders."
Following the results, no fewer than six analysts cut their price targets on Take-Two, with Cowen analyst Doug Creuitz saying he believes investors were worried about a much worse performance, and the Q4 results should be a significant relief. Creutz thinks the shares continue to look very inexpensive on out year, post-merger earnings power.
OTHER STORIES TO WATCH:
Tencent
-0.801 (-1.74%)
Ubisoft
+0.154 (+1.71%)
Electronic Arts
+4.67 (+3.67%)
Zynga
+0.485 (+6.12%)
Take-Two
+11.69 (+10.61%)
acquired by MSFT
+0.155 (+0.20%)
Bandai Namco
+0.83 (+2.50%)
Capcom
-0.06 (-0.44%)
Warner Bros. Discovery
+0.98 (+5.69%)
Nintendo
-1 (-1.80%)
Microsoft
+3.15 (+1.20%)
Sony
+1.14 (+1.32%)