Video game stocks get bounce with console transition

3:20 PM, Dec 18, 2013   |    comments
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Top video game publishers seem to be weathering the potentially troublesome transition to new home console game systems.

Pre-market trading was trending up Wednesday on each of the top three publicly-traded U.S. game publishers: Activision Blizzard (up about 2%), Electronic Arts (3%) and Take-Two Interactive (0.7%).

All three have seen their stock prices rally since last Thursday's release of November's top video game sales from The NPD Group. From market close on Thursday, Activision has risen from $16.66 to $17.06 Tuesday; EA from $20.97 to $22.75 and Take-Two from $16.42 to $17.48.

The top-selling games in November were Activision's Call of Duty: Ghosts, EA's Battlefield 4 and Ubisoft's Assassin's Creed IV: Black Flag. All three of those games are available on the PlayStation 3 and Xbox 360, as well as Sony's new PlayStation 4 and Microsoft's Xbox One, both of which hit the market last month. Take-Two's GTAV was No. 5 for the month.

Console makers have seen shipments of their new systems sell out as fast as stores get them -- each has sold more than 2 million systems. But Microsoft and Sony stock have not gotten the recent lift that third-party publishers have.

Gamer confusion on which platform to buy - or fewer dollars to spend on games because they were investing in new game systems - was expected to have some effect on sales of annual game releases compared to 2012 sales. But overall retail sales of $2.74 billion in November were up 7% from the same time last year.

Cowen & Co. analyst Doug Creutz stated in a note released after NPD's monthly report that "EA is likely in fine shape with (its soccer game) FIFA and Battlefield looking in-line or a bit better than guidance, depending on bundled and digital sales, and (football game) Madden likely only slightly below. However, we think Call of Duty is probably doing a bit worse than (Activision) expected, though the strong performance of (digital toy-game hybrid) Skylanders thus far may prove an offset."

And Call of Duty: Ghosts, Grand Theft Auto V (published by Take-Two) and Battlefield 4 are the three most-wanted titles on holiday wish lists, Nielsen recently reported.

"EA and Take-Two are ... both going to benefit, as their respective sports and action games get reboots on new systems," The Motley Fool's Jason Ditz noted, adding that Activision Blizzard's PC clout will "allow them to take risks the others may not be able to afford."

- by Mike Snider, USA TODAY

USA TODAY

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