Brean Capital Sees 'Strong Year' For Video Game Fans

Improvements in video game designs will provide "another strong year" for the $15 billion sector, an analyst said Monday, although industry sales were unchanged last year. Brean Capital's Todd Mitchell reiterated Buy ratings on three big names in the group, offering praise for new releases from two: Electronic Arts Inc.

and Activision Blizzard, Inc.

. For both companies, "game quality is up across the board," Mitchell said. "Each is coming into their own," obtaining advantage from improved game consoles and also in new offerings for mobile platforms, according to Mitchell. The analyst maintained a $68 target on Electronic Arts and called its "Starwars: Battlefront" game "fun as hell." Mitchell said the game is superior to its 2014 iteration. Activision's $28 target from Mitchell is also unchanged and he said the company's "Call of Duty: Black Ops" game "remains on top." Mitchell reiterated a Buy rating and $22 target on Take-Two Interactive Software, Inc.

but didn't comment on its products. Computer and video game sales hit a 2010 peak of $17.1 billion, falling nearly 10 percent by 2014, according to the Entertainment Software Association. http://www.theesa.com/wp-content/uploads/2015/04/ESA-Essential-Facts-2015.pdf Industry sales of $15.4 billion were flat last year compared with 2013, according to the group. But Mitchell said 2015 "should be another year of strong industry fundamentals and outperformance for the group." Electronic Arts shares are up about 33 percent in the year to date while Activision has gained about 23 percent. EA sales grew more than 28 percent last year to $4.52 billion; Activision sales fell 2 percent to $4.41 billion Take-Two shares are off more than 1 percent since Dec. 31. Its sales last year fell 54 percent to $1.08 billion. each is coming into their own in leveraging the current-gen consoles capabilities, as well as developing releases for emerging platforms such as mobile, to produce category leading titles