Black Opts 3, Uncharted 4, Pokemon Go, Grand Theft Auto

This is one of the few industries that the stock investors listen more to the opinion of the product users, i.e., gamers, than that of Wall Street analysts, as video gaming company’s revenue and stocks are totally determined by the success of their games.   Of course, when you talk to a gamer, and if you are not one yourself, you feel like you are talking to an alien who speak a different language.  The following, therefore, is a translation of gamers’ reviews on the top games and their stocks.

The Company: Activision Blizzard (NASD: ATVI)

The Game: Call of Duty: Black Ops 3

Firstly, the mother of all games, Call of Duty,  wrote the modern definition of first-person-shooter games. The simplicity of it was what made it so cool. Its original installment pitted you, an Allied soldier in World War II, against swarms of bad guys. The weapons and environment were accurate to those of the time. Add 12 years in real life and 120 years in “video game time,” and you have Black Ops 3. Taking place in 2065, 40 years after the events of Black Ops 2, the same basic principle applies- You’re a good guy, they are bad guys, figure it out. Oh, and did I mention that instead of Axis Powers, now there are zombies? How awesome is that?

Call of Duty: Black Ops 3 was the top-selling game of 2015, despite only being released in November. This is especially impressive considering the other big names it had to compete with- Fallout 4, NBA 2K16, Rainbow Six: Siege, and Star Wars Battlefront. Being well under a year old, it has already sold 25 million copies, bringing in close to $100 million in revenue for Activision. Sorry, World of Warcraft fans, but this round goes to Call of Duty.

The Company: SONY (NYSE: SNE)

The Game: Uncharted 4

Uncharted 4 is not just another treasure-hunter game. The tension, the diversity, the pace and the aesthetic value of “Nate’s Last Adventure” is something we’ve never experienced before. You see what the characters see. You feel what the characters feel. The surreal of a “functional gameplay formula” shows us the thirty-year experience of Naughty Dog, one of the most valuable videogame developers out there today.  Uncharted 4 is one of the best action game ever created.

Uncharted 4, on its way to break all the records, has sold 2.7 million units in the first week and 28 million units since the debut in May 2016.  It is expected to contribute additional $4 billion to Sony’s 2015’s $12.3 billion gaming revenue.  Even with a lofty forward PE around 40, keep in mind that it is Sony, Uncharted 4 alone will add over 6% on Sony’s 2016 top line growth.

The Company: Nintendo (OTC: NTDOY)

The Game: Pokemon GO

Do I really need to say anything about Pokemon?  “Pokemon Go” is an instant hit once you see swarms of adults gathering in public places to hunt.  Who could’ve guessed that an old 1996 Korean-made collectible card for children would make everyone go outside and explore 20 years later?  What is relevant is that this game has people out and about.  There’s a group experience event going on with Pokemon Go, and it’s addictive to simply be part of the collective.

In just a month, Pokemon GO has generated $64 million in revenue for Nintendo, which is 7% of its Q2 2015 revenue.  In just a month, on average, it has been downloaded over 170,000 times per day.  In just a month, 3% of the US population has already played it.  In just a month, more than 100,000 US small businesses have bought Pokemon’s “lures.”  Finally, in just a month, the ailing Nintendo stock broke out of the low since 2006’s release of the “Wii.”  Even with a more than 60% jump in Nintendo’s stock since July, at this point, we believe the sky is the limit.

TTake-Two Interactive Software, Inc. (NASD: TTWO)

Grand Theft Auto Series

The genius of “Grand Theft Auto” is the name of Grand Theft Auto. Can you picture that you are teaching your two-year-old to play “How to steal a car” and “tend to ladies of the night?”

GTA V is funny, genuinely laugh out loud funny – the humor is told through situation, through incredibly clever writing and wonderful sense of place. Really, that says everything you need to know about GTA V.  The world of Grand Theft Auto V is undeniably a masterpiece and has set a very high bar for sandbox gaming not only for this generation but for the next gen which is so closely upon us. Beyond the game’s story line, you’ll be able to put in hundreds of hours just wandering the city streets and never be bored doing so.

Even though it was released as early as 2013, GTA V remains the most popular and highest selling game of all time.  As of today, more than 65 million units of GTA V have been sold. The game series has brought in more than $9 billion for the company, with GTA V estimated at $2.3 billion.  GTA V alone accounted for 41% of 2015 total revenue.

We like the stock because this is the only game in town that both your parents and you will play together.

 

 

 

 

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