Video game stocks witnessed a mixed trend over the past week. One of the major events that made headlines was the return of Zynga, Inc.’s ZNGA founder Mark Pincus as its new CEO. Further, closure of the International Game Technology IGT and GTECH S.p.A. merger was another top story. This news was followed by Electronic Arts Inc.’s EA, collaboration with Illumination Entertainment and Universal Partnerships & Licensing for bringing the upcoming American 3D computer-animated comedy — Minions —into mobile games.
Top Stories Over the Last Week
1. GTECH S.p.A. and International Game Technology merged to form International Game Technology PLC. The new company is trading on the New York Stock Exchange under the ticker symbol IGT.
2. Zynga’s fate is expected to turn around as founder Mark Pincus takes office as the new CEO replacing Don Mattric, who served for two years. Following the news, the stock gained almost 3.6% (10 cents), eventually closing at $2.90. Of late, Zynga has been trending down losing more than 30% of its market value over the past year. To date, Zynga has lost over 60% from its peak, concerning investors regarding its prospects in the highly competitive video game industry. (Read More: Will Mark Pincus' Return as New CEO Save Zynga's Future?)
3. Electronic Arts, in collaboration with Illumination Entertainment and Universal Partnerships & Licensing, announced a new multi-title partnership to add characters from the upcoming Illumination films to its new mobile games. Minions Paradise will be the first game under this collaboration, in which players can create a tropical Minion utopia and take control of Phil, a Minion character. Under the new partnership, Illumination will be responsible for the creative team for content development, which would support EA’s mobile development team.
4. Last week, Glu Mobile Inc. GLUU, announced the launch of Tap Sports Baseball 2015 on the App Store and Google Play. Tap Sports Baseball 2015 boasts star player David Ortiz as well as real players from all 30 teams through Glu’s partnership with the Major League Baseball Players Association.
5. Activision Blizzard, Inc. ATVI unveiled the first wing of Blackrock Mountain, Adventure for Hearthstone: Heroes of Warcraft. The first wing of Blackrock Mountain is available for players, and Activision aims to release one new wing every week in the rest of this month. Each of the Adventure’s five wings is available for purchase separately for 700 gold or $6.99 per wing. In addition, Blackrock Mountain bundle package is available for $24.99.
Performance
The following table shows the price movements of the major video game companies over both the past 5 trading days as well as the last 6 months:
|
Company |
Last 5 Days |
Last 6 Months |
|
ATVI |
1.59% |
13.88% |
|
EA |
-0.26% |
64.67% |
|
GLUU |
0.20% |
13.93% |
|
MSFT |
2.95% |
-10.94% |
|
NTES |
7.75% |
32.11% |
|
TTWO |
-0.72% |
13.69% |
|
ZNGA |
-14.39% |
15.83% |
Over the last 5 trading sessions, the company that gained the maximum was NetEase, Inc. NTES increasing 7.8% as against Zynga, which lost the most – 14.4%. Last week, the stock dropped further (Read more: Take-Two Interactive Enters Oversold Territory). We believe that China's flat annual consumer inflation rate and expected financial stimulus by the government have helped Chinese stocks like NetEase gain significantly.
Over the 6-month period, Electronic Arts surged the most — nearly 50.6%. We believe that the continued growth in the company’s mobile gaming audience makes it one of the most consistently performing video game makers in current times. In addition, strategic collaborations with the likes of Google, Apple and Facebook in developing its gaming platform will add to its bottom-line growth over the long term.
Over the 6-month period, the stock that lost the most was Microsoft Corp. MSFT with an 8.3% share price decline.
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