With Sony’s [JPX:6758] flagship console Playstation 5 and Microsoft’s [MSFT] Xbox Series X in short supply thanks to the global shortage of semiconductors there will be many gamers asking Santa for games for older generation consoles this Christmas.
Here are the video game developers, publishers and titles to keep an eye on over the Christmas period.
The California-based publisher is best known for its FIFA series. Regardless of what you think of the ethics of so-called in-game loot boxes, there will undoubtedly be an increase in ‘FIFA 22’ microtransactions over the holiday as players look to improve their squads for online games by purchasing card packs.
EA’s ‘It Takes Two’, a co-op, multiplayer action adventure game, was released back in March to much fanfare and critical acclaim. It won game of the year at the industry's annual Game Awards earlier this month, which is bound to give its seasonal sales a boost; three million copies had been sold as of October.
However, the publisher’s ‘Battlefield 2042’, which was launched in mid-November, hasn’t been so well received. The majority of the 74,000-plus reviews on Steam have been negative, with complaints about the game being unfinished and containing numerous bugs.
Jefferies analyst Andrew Uerkwitz flagged the failure but continues to keep a ‘buy’ rating for EA, along with a price target of $165, which implies a 27% upside from its 20 December closing price of $129.92.
“We are watching Steam user reviews and noticing how they are more a place to complain, as opposed to review games,” wrote Uerkwitz in a note to clients reported by MarketWatch. “Battlefield 2042 has ranked near the bottom based on reviews, yet currently sits at the top on the bestseller list.”
While updates and patches are already being issued across multiple platforms to fix the issues, there is a general feeling that the game was rushed.
The disaster of CD Projekt Red’s [WSE:CDR]’s title ‘Cyberpunk 2077’, released in the run-up to Christmas last year, shows the pitfalls of launching a game before it’s ready. Sony was forced to issue refunds, and the game was delisted from the Playstation store.
“We are watching Steam user reviews and noticing how they are more a place to complain, as opposed to review games...Battlefield 2042 has ranked near the bottom based on reviews, yet currently sits at the top on the bestseller list” - Jeffries analyst Mark Uerkwitz
In the quarter ending 30 September, Take-Two’s best-known title, ‘Grand Theft Auto V’, had sold over five million copies, taking total units shifted to 155 million. Since its release in 2013, the game has generated more than $6bn in revenue.
On its second quarter 2022 earnings call in November, the company announced it was revising its full-year sales outlook from between $3.2bn and $3.3bn to $3.3bn and $3.4bn. It cited strong demand for GTA V, as well as other popular titles, including Red Dead Redemption 2 and NBA 2K.
Part of the attraction of these games is their online play modes. In a recent interview with CNBC, Take-Two CEO Strauss Zelnick likened the ability to connect, play and talk with other gamers to interacting in the metaverse. “I would argue we’re probably the biggest metaverse company on Earth,” he boldly stated.
“I would argue we’re probably the biggest metaverse company on Earth” - Tak-Two CEO Strauss Zelnick
The company is currently embroiled in controversy surrounding an alleged culture of sexual harrassment. Without dismissing these allegations, the developer’s ‘Call of Duty’ franchise should see strong sales over the holiday period.
The newly released ‘Call of Duty: Vanguard’ was the best-selling game of November. It is the second biggest selling game this year behind ‘Call Of Duty: Black Ops Cold War’, which was released in November 2020.
Despite the franchise’s popularity, MKM Partners analyst Eric Handler warned in a note to clients seen by Barron’s that the problems surrounding the company aren’t likely to go away unless CEO Bobby Kotick is removed.
“From what we have read from press reports and social media, employee morale is extremely low, which is likely to impact not only game development timelines, but also quality,” wrote Handler.
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