Over the last five trading sessions, Video Game stocks mostly witnessed an uptrend. While Zynga, Inc. (ZNGA), Activision Blizzard, Inc. (ATVI) gained momentum, Glu Mobile, Inc. (GLUU) and NetEase, Inc. (NTES) tumbled over the same time frame.
Some of the major stories of the past week include the launch of Zynga’s new game Looney Tunes Dash! and Flappy Bird winning Google's Most Searched-For Game of the Year title. Further, the launch of critically acclaimed video game Evolve in 2015 grabbed headlines.
Top Stories over the Last Week
1. Zynga recently launched a new mobile game Looney Tunes Dash! following the launch of King’s Candy Crush Soda Saga on Windows smartphones. The new game is similar to Temple Run and includes characters like Bugs Bunny, Roadrunner and Tweety. The game registered strong receptions and currently rated 4.1/5 on Google Play.
2. With 2014 approaching its end, it is time to list the top of the charts video games. This time, Flappy Bird was labeled as Google's Most Searched-For Game of the Year. Reportedly, Flappy Bird, developed by Vietnamese Dong Nguyen and published by Vietnam-based GEARS Studios, has surpassed the popularity of top-of-the-charts games like Activision’s Destiny. Unfortunately, the game is not available in the iOS App Store. However, several clones of this game exist, reflecting its popularity.
3. International Game Technology (IGT) recently launched its new slot game Jeopardy! on DoubleDown Casino that can be played on either desktop or mobile device. The TV quiz show Jeopardy!, which celebrated its 30th anniversary this year, enjoys worldwide popularity. The game now features new elements like Wild Rush, which adds another level of competition. We believe that the launch of popular games in desktop and mobile format will further extend the reach of the company’s casino games and add to financial synergies.
4. Activision Blizzard finally made its hit game Hearthstone: Heroes of Warcraft available on Android tablets. The famous strategy card game was already available for iPad and Windows tablet users. However, the recent launch would increase market share for the company and also propel popularity of the game among the majority of tablet users. It is expected that the game will soon be available on iPhone and Android smartphones.
5. The year 2015 is expected to be exciting for video game players as the much anticipated video game Evolve is scheduled to be launched on Microsoft’s (MSFT) Xbox One. Developer Turtle Rock Studios and publisher 2K Games, a wholly owned subsidiary of Take-Two Interactive Software, Inc. (TTWO), are releasing its beta version on Xbox One on Jan 17. The game has already won over 60 awards and editorial honors, becoming the most critically acclaimed upcoming game in 2015.
Performance
The following table shows the price movements of the major video game companies over both the past five trading days as well as the last six months:
|
Company |
Last 5 Days |
Last 6 Months |
|
ATVI |
1.55% |
-8.07% |
|
EA |
1.74% |
30.25% |
|
GLUU |
-1.21% |
-7.42% |
|
MSFT |
1.30% |
15.34% |
|
NTES |
-0.99% |
31.69% |
|
TTWO |
0.63% |
30.55% |
|
ZNGA |
11.07% |
-23.51% |
Over the last 5 days, Zynga remained the top gainer with 11.1% share price rise. Despite diminishing market value over the year, the stock managed to gain some strength over this time frame backed by the Looney Tunes Dash! launch. However, the street consensus remains negative for the near term given its financial underperformance.
The company that lost the most over the same time frame is Glu Mobile, declining 1.2%. We believe the recent movement represents a correction after the rally following news about insider buys.
Over the six-month period, NetEase gained the maximum — nearly 31.7%. We believe the company’s exemplary performance across business segments and the recent upgrade by JPMorgan Chase & Co. from a neutral rating to overweight raised its market value. In addition, the expected positive impact of China’s interest rate cuts on the company given its high exposure to the Far East remains a significant growth catalyst. On the other hand, the stock that lost the most over this time period is Zynga, which dropped 23.5%.
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