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The Zacks Analyst Blog Highlights: Microsoft, Sony, Nintendo, Activision Blizzard, and Electronic Arts

For Immediate Release

Chicago, IL – November 17, 2021 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Microsoft Corp. MSFT, Sony Corp. SONY, Nintendo Co. NTDOY, Activision Blizzard, Inc. ATVI and Electronic Arts, Inc. EA.

Here are highlights from Tuesday’s Analyst Blog:

4 Stocks to Watch as Videogame Sales Continue to Soar

The craze for videogames is far from over and gamers have been aggressively spending on content, hardware and software. Many had predicted that the gaming market would slow down once outdoor entertainment and recreation joints open, but that hasn’t been the case.

Spending on videogames has been on the rise, with October turning out to be a great month yet again in terms of sales. This has seen videogame makers like Microsoft Corp., Sony Corp., Nintendo Co., Activision Blizzard, Inc. and Electronic Arts, Inc. benefiting.

Videogame Sales Soar

Consumer spending on videogames jumped an impressive 16% in October on a year-over-year basis, reaching an October record of $4.4 billion. Spending rose across all sections that include content, hardware and software.

The maximum spending was on hardware that primarily drove sales. Hardware sales surged a whopping 82% year over year to hit $472 million. Software sales grew 11% on a year-over-year basis.

On a year-to-date basis, spending on hardware, content and accessories hit $46.7 billion, increasing 12% year over year. This once again shows the underlying strength in the industry and how the craze for gaming has continued to grow over the years.

The pandemic saw people spending more on videogames as outdoor entertainment wasn’t possible. Analysts had predicted that the gaming market would slow down once the economy reopens as people would have more outdoor entertainment options. However, that hasn’t impacted the videogaming industry.

Future Holds Promise

October has always been a good month for the videogame industry, as multiple titles are released. This year was no different and gamers continued to spend. Last year saw the release of games like FIFA and Watch Dogs: Legion. This year was even bigger with the release of titles like Far Cry 6, Back 4 Blood, and Nintendo’s Metroid: Dread.

The three titles, Far Cry 6, Back 4 Blood, and Metroid: Dread were also the top-selling titles for the month.

The gaming industry so far has had a great 2021. The first two quarters saw spending rising, and the third quarter was no different.  According to the Q3 2021 Games Market Dynamics: U.S. report by the NPD Group, consumer spending on video games in the United States hit $13.3 billion in the third quarter, jumping 7% year over year.

This also marks the highest third-quarter spend in the history of videogaming. Hardware sales rose 60%, while overall spending on content reached $11.7 billion.

Our Choices

The videogame industry was already thriving and this year so far has proven to be good. Given this scenario, it would be ideal to invest in these videogame stocks.

Electronic Arts, Inc. is a leading developer, marketer, publisher and distributor of interactive games (video game software and content). EA distributes gaming content and services through multiple distribution channels as well as directly to consumers (online and wirelessly) through its online portals.

Electronic Arts’ expected earnings growth rate for the current year is 21.7%. The Zacks Consensus Estimate for current-year earnings has improved 5.4% over the past 60 days. EA shares gained 3.7% in the past 30 days.Currently, Electronic Arts has a Zacks Rank 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Microsoft Corp.is one of the leading videogame makers and manufacturers of hardware and accessories. MSFT has been expanding its footprint in the industry and recently announced that it will be acquiring videogame maker ZeniMax Media.

Microsoft is a pioneer in consoles andon Nov 15, its flagship Xbox turned 20 years. The other MSFT launches include Xbox 360 (2005), Xbox One (2013) and the latest Xbox Series consoles (2020).

For the current year, Microsoft’s expected earnings growth rate is 14.9%. The Zacks Consensus Estimate for current-year earnings has improved 6% over the past 60 days. Microsoft shares gained 10.5% in the past 30 days. MSFT has a Zacks Rank #3 (Hold).

Sony Corp. designs, manufactures and sells several consumer and industrial electronic equipment. SONY’s product roster comprises audio and video equipment, televisions, displays, semiconductors, electronic components, gaming consoles, computers and computer peripherals, and telecommunication equipment. 

Sony Corporation’s expected earnings growth rate for next year is 14.1%. The Zacks Consensus Estimate for current-year earnings has improved 2.1% over the past 60 days. SONY shares gained 10.2% in the past 30 days. Sony Corp. currently carries a Zacks Rank #3.

Activision Blizzard, Inc. is a leading developer and publisher of console, online and mobile games. ATVI’s Call of Duty is one of the most popular gaming franchises globally. Moreover, Activision Blizzard’sOverwatch League can be considered a pioneer of the e-sports concept.

Activision Blizzard reported third-quarter 2021 non-GAAP earnings of 89 cents per share, beating the Zacks Consensus Estimate of 71 cents. ATVI’s expected earnings growth rate for the current year is 11%. The Zacks Consensus Estimate for current-year earnings has improved 0.8% over the past 60 days.  Activision Blizzard carries a Zacks Rank #3.

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.


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Microsoft Corporation (MSFT): Free Stock Analysis Report
 
Activision Blizzard, Inc (ATVI): Free Stock Analysis Report
 
Electronic Arts Inc. (EA): Free Stock Analysis Report
 
Nintendo Co. (NTDOY): Free Stock Analysis Report
 
Sony Corporation (SONY): Free Stock Analysis Report
 
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