Science & Technology
Science and Technology
Science and Technology
Wed, June 16, 2010
Tue, June 15, 2010 Electronic Arts, Sony, Activision Blizzard, Take Two Interactive and Walt Disney
CHICAGO--([ BUSINESS WIRE ])--Zacks.com Analyst Blog features: Electronic Arts (Nasdaq: [ ERTS ]), Sony Corporation (NYSE: [ SNE ]), Activision Blizzard (Nasdaq: [ ATVI ]), Take Two Interactive (Nasdaq: [ TTWO ]) and Walt Disney (NYSE: [ DIS ]).
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Here are highlights from Mondaya™s Analyst Blog:
Video Games Face Tough Times
The video game industry continues to see the after effects of the recession, as revealed by the latest data from market research group NPD. According to the NPD research data, software game sales were down 8.0% from the beginning of the year, down more than $200.0 million from the comparable year-ago period.
Year to date, total revenue from software game sales stands at $2.5 billion. Nintendo Company Ltd. leads the video game industry with five titles in the top 10, while Electronic Arts (Nasdaq: [ ERTS ]) holds the second spot with two titles. Sony Corporation (NYSE: [ SNE ]), Square Enix and Activision Blizzard (Nasdaq: [ ATVI ]) hold the third position with one title each.
Although the video game industry was in the red in the first half of 2010, new titles like Red Dead Revolver from Take Two Interactive (Nasdaq: [ TTWO ]), Medal of Honor from Electronic Arts, Alan Wake and Halo: Reach from Microsoft, Call of Duty from Activision Blizzard and Epic Mickey from Walt Disney (NYSE: [ DIS ]) are expected to boost revenue in the second half of 2010.
The gaming industry is experiencing a major paradigm shift, as console makers and software publishers are delivering their content directly to the consumers, bypassing retailers.
Due to higher development costs for new game titles and considerable lead time on game development, publishers continue to depend on safe franchises to sell games. However, the introduction of consoles, such as Sonya™s PlayStation 3, Microsofta™s Xbox 360 and Nintendoa™s Wii enabled publishers to release their content digitally.
Digital downloads are growing at a rapid pace. Sony said total downloads on the PlayStation Network increased 60% from 2009 to 2008, while digital-only revenue rose 155% in 2009 from 2008.
However, the aggressive use of digital media has intensified competition, as smaller players are also entering the video game market. It has become easier and cheaper for smaller companies to market their products with the help of digital distribution.
But it is not all that easy for publishers. Industry analysts and executives believe the transition to digital remains sluggish, as the industry continues to rely on subsidizing consoles in the hope of selling software to make up the loss. The analysts believe that by going digital, the retail side of the business will completely die.
Additionally, mobile gaming is an upcoming business wherein a complete transition to digital distribution is possible going forward.
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