Game Publisher Stocks are Down, Maybe Kinda?

So, when I looked early this morning, it was already news that EA was down due to the official report that they missed on holiday sales. Been hovering around the -13-15% mark. In isolation I wouldn’t think much of it, but it’s almost looking like a trend at this point. There seem to be an awful lot of developers, both hardware and software, reporting weak holiday sales. Kinda put the idea in my head that maybe the industry as a whole turned down a bit.

It was also in my feed that Take-Two had taken a hit for it’s earnings report. Kinda reinforced the idea that’s forming. At least, until I actually looked it up. Honestly, I’m a little confused. I’ve got reports saying they missed and others saying surpassed expectations. I can say that according to the actual news report from Take-Two the numbers reported by that second article seem to be incorrect. One article said the stock was down not due to weak sales but weak guidance. I didn’t know what that even was, but apparently it’s a sort of “we expect this to happen” kind of statement.

It’s not just those two though, it looks like the other developers/publishers on my list are also down overall today compared to yesterday, in the general ballpark of -10-15%. I’ve read a few things saying the market as a whole is kinda down-ish due to the state of the union address, so that may also be a contributing factor. I mean, let’s face it, I have no idea what I’m talking about here.

I also didn’t read any of this especially closely, just enough to get a general idea of what’s going on. I’ve actually considered looking into the virtual market game that MarketWatch has, if only out of sheer curiosity. No better way to learn than by doing, right?

Square Enix is also making some minor headlines with their Q3 report as well. Ironically, their actual (US) stock is up. The Japanese and German listings, however, are down. Their report also shows sales and income down from last year, but also expenditure is higher as well. It will probably improve in the near future though, I know the pre-orders for the FFXIV expansion go live soon, if they haven’t already. A year ago I would have been all over that pre-order, so I’m sure that’ll help bring in a little spike of income. Their projected end of year is still down over last year though.

It would appear that most of the lower than expected sales were in the mobile/browser, mmorpg, and merchandising areas, while development and advertising costs rose over the same period. At least, that’s what the press release says.

Meanwhile, operating income declined year-on-year due to greater amortization of development costs for major new titles and increased advertising expenses.

In the smart devices and PC browser area, many of the titles newly launched in the prior fiscal year performed below expectations and failed to generate additional revenue on top of that from existing established games. A decrease in licensing income and an increase in advertising expenses also resulted in a year-on-year decline in net sales and operating income. “Romancing SaGa ReuniverSe,” which was launched in December 2018, made a good start (net sales from this title are
not recognized in Q3 but will be booked in Q4).

In the area of massively multiplayer online role-playing games, net sales and operating income decreased compared to the same period of the prior fiscal year, which had seen the launch of  expansion disks for “FINAL FANTASY XIV” and “DRAGON QUEST X.”

I think that’s all for my dry gaming stock watching for today though. I’m looking forward to the release of Anthem and how that plays out in this regard, though I suppose we probably won’t get a decent financial report for another few months yet. Such fickle and volatile things, these stocks.