In May 2015, Universal Parks & Resorts, a unit of Comcast Corp. CMCSA-owned NBC Universal announced a strategic partnership with Nintendo Co. Ltd., the worldwide leader in the creation of interactive entertainment and home video game systems such as Nintendo 64 and Game Boy. Toward this end, both the companies provided detailed information on their theme park business expansion plans through a press release and video announcement on Nov 29.
Deal Details
Per the deal, Universal Parks & Resorts is planning to launch themed areas based on Nintendo’s video games at three of the cable MSO (multi serice operator)’s four Universal Studios theme parks. These are Universal Studios Japan, Osaka; Universal Orlando Resort in Orlando, FL; and Universal Studios Hollywood, Hollywood, CA.
The main purpose behind this expansion is to bring the characters, action and adventure of Nintendo video games to life within Universal theme parks with a touch of creativity and innovation.
The theme parks will be expansive, imaginative, mesmerizing and interactive. Moreover, they will have themed environments offering multiple attractions in the form of shops and restaurants. The parks will also be designed to cater to different tastes and preferences, irrespective of the age or gaming experience of the visitors. The gaming experience will be so vivid that players would feel that they are playing their favorite games in real life settings.
Each Universal theme park will announce details of its specific Nintendo areas in the days ahead. The first such announcement is expected soon.
Prospects
Comcasthas been focusing on its theme park business for growth of late, investing billions of dollars. Acquisition of NBC Universal has helped the cable MSO gain ownership of the latter’s theme parks. Moreover, Universal Parks & Resorts’ deal with a Chinese state-owned consortium – Beijing Shouhuan Cultural Tourism Investment Co. Ltd. – to build a Hollywood theme park in Beijing bodes well.
Notably, over the last three to four years, the theme park business has reaped significant results for Comcast. In the last reported third quarter of 2016, Theme Parks revenues for the company totaled $1,440 million, up a whopping 60.6% year over year. Universal Theme Parks have gained much of the popularity from the launch of Harry Potter and Transformers movies.
We believe that the latest alliance will help Comcast expand its theme park business and also cash in on the growing opportunities in the emerging markets of Japan and Asia.
Meanwhile, rival The Walt Disney Company DIS is building new themed areas in its parks based on the ‘Star Wars’ film and ‘Avatar’ flicks.
On the other hand, this deal might prove to be a boon for Nintendo, helping it popularize its brand and draw more consumers to its video game business, which faces fierce competition from the likes of Sony Corporation SNE and Microsoft Corporation MSFT. Moreover, according to its most recent financial report, Nintendo has gained considerably from its “Pokémon Go” mobile app.
Comcast currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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