Big video games make some costly misfires – archyde

In an unusual twist to the Christmas sales season, the biggest games from the top three game publishers have made notable misfires. Activision Blizzard’s Call of Duty: Vanguard received the franchise’s lowest critical rating and reportedly had poor initial sales. Electronic Arts’ “Battlefield 2042” also performed poorly with critics and suffered from a number of technical problems during its launch. Bugs also affected the release of “Grand Theft Auto: The Trilogy” by Take-Two Interactive Software, which was also devastated by reviewers – a rarity for the popular franchise. It was named the sixth worst game of the year by the critics score merger site Metacritic.

All three games went on sale in November. They face stiff competition from free online titles like Fortnite from Epic Games.

EA, Take-Two and Activision have not yet announced financial results of their recent launches. Activision typically released some sort of update after its annual Call of Duty rate, but the company is now plagued by an internal crisis stemming from alleged treatment of women workers.

EA and Take-Two do not face the same predicament. But both have been hit by the impact of the pandemic on game production with so many developers still working remotely. At an investment conference on the day Grand Theft Auto was released, Take Two boss Strauss Zelnick said, “I don’t think working from home is that productive,” although he also noted that new technology is having an impact on most cutting-edge games also on the development times. EA had already postponed the release of “Battlefield 2042” by a month to the start date on November 19, citing the work-from-home challenge.

Investors were already cautious about the video game sector as they worried about the industry’s difficult comparisons with the pandemic surge in gameplay over the past year. Analysts expect combined net bookings for Activision, EA and Take-Two to increase 10% this calendar year, after increasing 23% last year, according to FactSet.

EA and Take-Two stocks fell 4% and 12%, respectively, in the year before their respective game launches, compared to a 25% gain in the S&P 500 through mid-November. Both stocks have continued to decline since then, though nowhere near the sell-off, which has taken nearly a third of Activision’s market value since the State of California sued the company in July over its workplace environment.

Activision is likely to stay under that cloud as its internal crisis creates additional uncertainty for its future gaming pipeline. But EA and Take-Two can both handle their respective misfires. EA’s free online game Apex Legends competes well in the shooter category; MScience’s Corey Barrett noted in a recent report that the game’s bookings growth “accelerated significantly in November.”

Take-Two will soon be showing the results of an extensive expansion of its gaming pipeline. Analysts expect double-digit growth in bookings for the company’s next two fiscal years, compared to a projected 2% decline for the current one, which ends in March. Given their current low valuations, EA and Take-Two are in a good position to move up.

(by Dan Gallagher)

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Reference-www.nach-welt.com

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