{"id":206705,"date":"2024-05-15T09:30:00","date_gmt":"2024-05-15T13:30:00","guid":{"rendered":"https:\/\/ibkrcampus.com\/?p=206705"},"modified":"2024-05-16T03:59:55","modified_gmt":"2024-05-16T07:59:55","slug":"what-you-missed-this-week-in-video-games-52","status":"publish","type":"post","link":"https:\/\/www.interactivebrokers.com\/campus\/traders-insight\/securities\/stocks\/what-you-missed-this-week-in-video-games-52\/","title":{"rendered":"What You Missed This Week in Video Games"},"content":{"rendered":"\n

PlayStation names new co-CEOs<\/strong><\/p>\n\n\n\n

“Game On” is The Fly’s weekly recap of the stories powering up or beating down video game stocks.<\/p>\n\n\n\n

NEW RELEASES:\u00a0<\/strong><\/h2>\n\n\n\n

This week’s most notable release is the PC port of Sony’s\u00a0(SONY)<\/a>\u00a0open-world action game “Ghost of Tsushima,” which originally released on PlayStation 4 in 2020. The PC port will be available on May 16.<\/p>\n\n\n\n

SIE CHANGES:\u00a0<\/strong><\/h2>\n\n\n\n

Along with its quarterly earnings report. Sony and Sony Interactive Entertainment announced the new leadership structure of SIE. Effective June 1, Hideaki Nishino will be appointed CEO of SIE’s Platform Business Group, and Hermen Hulst will be appointed CEO of SIE’s Studio Business Group. Hiroki Totoki, who has been serving as interim CEO of SIE, will serve as Chairman of SIE in addition to his role as President, COO and CFO of Sony Group Corporation. Nishino and Hulst will report to Totoki and intend to collaborate closely to strengthen each core business while maximizing synergies at SIE. Nishino is currently SVP, Platform Experience Group. Hulst is currently serving as SVP and Head of PlayStation Studios.<\/p>\n\n\n\n

MORE EARNINGS:\u00a0<\/strong><\/h2>\n\n\n\n

Last week, Electronic Arts\u00a0(EA)<\/a>\u00a0reported lower-than-expected Q4 earnings and net bookings and guided for downbeat Q1 and FY25 net bookings. The company noted that net bookings for FY24 were up 1% year-over-year overall, however, with the growth highlighted by “record cash flow” and strong earnings growth from “EA Sports FC” and “Madden NFL.”<\/p>\n\n\n\n

Following the report, BMO, Baird, and Deutsche Bank all lowered their price targets on EA, with BMO noting that the below-Street results were largely on headwinds from “Apex Legends,” live services, and title-specific tough comps. Deutsche’s Benjamin Soff, however, said that multi-year guidance still shows margin potential.<\/p>\n\n\n\n

Meanwhile, Roblox (RBLX)<\/a> also reported quarterly results last week, with Q1 earnings and bookings beating Wall Street estimates and revenue growing 22% year-over-year. Average daily active users also jumped 17%, while average monthly unique players rose 13% year-over-year. Looking ahead, however, the company provided a conservative bookings outlook for Q2 and cut its bookings guidance for FY24.<\/p>\n\n\n\n

Following the report, no fewer than ten analysts cut their price targets on Roblox, though MoffettNathanson bucked the trend, upgrading the stock to Neutral from Sell. The firm cited valuation for the upgrade following the 22% post-earnings selloff on Thursday, adding that Roblox’s risk\/reward “feels much more balanced.” The firm notes that even through 2024 is a building year for Roblox’s advertising plans, there are ready and willing partners that want to spend on the platform.<\/p>\n\n\n\n

SQUARE ENIX STRATEGY CHANGES\/LAYOFFS:\u00a0<\/strong><\/h2>\n\n\n\n

In response to declining quarterly earnings, video game publisher Square Enix\u00a0(SQNXF)<\/a>\u00a0unveiled a three-year plan called “Square Enix Reboots and Awakens,” in which it hopes to rethink many parts of its business, most notably a “shift to a multiplatform strategy,” IGN’s Wesley Yin-Poole\u00a0reported<\/a>. The company intends to “aggressively pursue a multiplatform strategy” that would include Nintendo\u00a0(NTDOY)<\/a>\u00a0consoles, PlayStation, Xbox\u00a0(MSFT)<\/a>, and PC, the author says. The Fly notes that several high-profile releases from Square Enix in recent years, including “Final Fantasy XVI” and “Final Fantasy VII Rebirth,” released exclusively on PlayStation 5.<\/p>\n\n\n\n

In addition, VideoGamesChronicle’s Andy Robinson reported <\/a>that Square Enix is slated to make an unconfirmed number of job cuts as part of its broader business overhaul. According to staff who attended an internal meeting, president Takashi Kiryu said that both of the video game maker’s U.S. and European divisions would be hit with layoffs, which are set to occur over the course of the next month. While the scale of the cuts wasn’t shared, workers were informed that those working in publishing, IT, and the company’s Collective indie games unit would be predominantly affected, Robinson noted.<\/p>\n\n\n\n