Wedbush Securities Vice President of Equity Research Nick McKay, who covers sports programs and sports sectors, shared his insight into some of the biggest drivers in the industry, as Electronic Arts Inc. AE*, nintendo addr NTDOY, GameSpot Corp. GMEand -Duo Interactive Software Inc. TWO.
By conversation with the host Joel Elconin In PreMarket Prep Benzinga on Wednesday, McKay said that the video game sector has been “forced by the manager to pay more attention to the next 10 years and the future is predictable.”
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The analyst talked about the federated companies and the intention of many large publishers, such as . Action Blizzard Inc. ATVI making large sums of money to make a pact with their protectors.
But the e-sports industry is not as solid as it may appear: “It’s been difficult for anyone to come up with a compelling business model for E-Leagues,” McKay stated. “I advertise them to qualify some of the major games from these big publishers, who use them to attract new users who might not be looking for titles without such an alliance.”
What do you think of Electronic Arts, GameSpot, Duo Interactive, and Nintendo?
When asked about Electronic Arts (EA), McKay recalled that the video game company, which has headquarters in Redwood City, California, is gearing up for the release of Star Wars Jedi: Fallen Order on April 28, and is already looking at early reviews. affirmative
EA’s previous Star Wars game sold 8 million units in just one and a half months and 10 million units in four and a half months. “The expectations for this game are pretty significant,” McKay said.
McKay also discussed GameStop’s recent performance. The company surprised investors by doing much better than expected in the last quarter turning a profit.
“The challenge in Game Stop is that there are two sides to the business of that stuff: you have the software part, but over time people tend to buy games digitally, as opposed to going to the store and buying them,” he said. “Game Stop obviously excels when it comes to getting people to buy software in store, so it’s a significant long run from the software side.”
“In the hardware from there; No Group Corp sound The PS5 has done really well in the last two parts. Microsoft Corp. MSFT And Nintendo had more challenges. So, on the hardware side, you’re kind of stuck on your PS5 for now,” he continued.
McKay stated that the potential acquisition of Activision Blizzard by Microsoft could boost demand for Microsoft hardware.
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When asked about Nintendo, McKay pointed out that the recent release of the Super Mario movie could drive more attention to Nintendo content. However, demand for the Nintendo Switch, which has been around since 2017, may be slowing down. No announcements have been made regarding price cuts, an updated version of the Switch or a successor. The upcoming release of the new Legend of Zelda: Spirit of the Wild in May is expected to be one of the biggest games of the year.
More: Get two email acquisition mobile video game developers Zynga The investor raised questions about the mobile market, which worked last year. Get-Two has a large pipeline of games and plans to release GTA VI, one of the most anticipated gaming titles in years.
While questions remain about the company’s fiscal year ending March 2024, McKay believes Take Two is a compelling long-term story.
“Between the games pipeline, the potential for mobile motion, and how big this “GTA VI” could be, it’s a pretty compelling long-term game in our opinion, pausing a little through questions about what’s going to be in the circus. One and a half months.” .
And what about AppLovin, Playtika, Unity, SciPlay and Getty?
About ” AppLovin Corp application, McKay explained that the company’s marketing business is a particularly pressing aspect of its operations. He believed that advertising is coming back to mobile games in a big way, Applovin and Unity Software Inc. OR’ he will be in a good position to benefit. The Unity engine is used for game creation, and seven out of 10 games use it, giving the company a solid foothold in mobile gaming, although it is gradually pushing into higher game formats.
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“When the economy rebounds again, you need to see your money flowing in advertising, and with the money in advertising it’s going to go to the games, as an opportunity for the growth of the entertainment industry. Of course, the unit should be in a good position to benefit. flow,” McKay said.
The expert also talked about Playtika Holdings Corp. PLTKAn Israel-based digital company specializing in the development and publication of mobile games.
“Playtika is almost all in-game spending, so it doesn’t have a significant marketing business at all. It really depends on the ability of users to continue to engage within their games. It’s among the best companies that we cover by extracting more money from their players over a time base, so a good enough core they will have on average,” he explained.
With more immediate returns to spending on these games as the economy rebounds, McKay said the company has a compelling growth opportunity.
SciPlay Corp.’s SCPL The focus on social games makes them an exceptional space in the casino. McKay said his games are more difficult for players to place because of their nature. However, he noted: “The thing that keeps SciPlay in terms of wider interest among investors is that it has a fairly low flow. The parent company Light and Wonder owns over 80% of the shares, so you don’t usually see a high volume of shares every day.”
McKay Getty Images Holding Inc GETTY, an American-British visual media company and developer of stock images, a publisher of photography, video and music. The Getty Library owns more than 477 million items. Getty’s expert highlights include major events, such as the Olympics, the World Cup, and the US election. The company’s income is affected by the cyclical nature of these events, with even-numbered years being more productive than odd-numbered years.
“One of the reasons the Getty party came down last month was that the government was providing 2023 that kind of reflected that dichotomy between an even and an odd number of years,” he said. “But we are hopeful that in the long term, the collection of goods and services that provide different uses and businesses, will position them for growth in the foreseeable future.”
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