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Video Game Makers Up On Strong Sales Data, Brean Capital Sees Expanding User Base For 2015

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Shares of video game makers Electronic Arts Inc. (NASDAQ: EA), Activision Blizzard, Inc. (NASDAQ: ATVI) and Take-Two Interactive Software, Inc. (NASDAQ: TTWO) traded higher at Friday’s open following strong year-end sales data from NPD.

Brean Capital analyst Todd Mitchell noted that “NPD reported total Video Game retail sales of $3.24 billion in December, down just 2 percent from $3.28 billion in December 2013 and better than our expectations for an 8 percent decline.”

The results “were underpinned by a 4 percent decrease in hardware revenue to $1.31 billion and a 2 percent decline in software sales to $1.25 billion, offset partially by 9 percent growth from accessories to $681 million,” according to the analyst note.

Mitchell felt the strong fundamentals were a set up for a digital ramp in 2015. “Total industry digital sales in December grew 11 percent to $1.2 billion from $1.1 billion a year ago, according to SuperData research...We believe this growth is being driven by an expanding next-gen user base and better execution from major publishers for online game-modes.”

The firm maintained a Buy rating on all three stocks.

Electronic Arts gave back its earlier gains and recently traded at $46.66, down 0.04 percent.

Activision Blizzard was the strongest of the three stocks Friday, recently trading at $19.75, up 6.3 percent.

Take-Two Interactive recently traded at $28.20, up 1.8 percent.

Posted-In: Brean Capital Todd MitchellAnalyst Color Analyst Ratings Trading Ideas

 

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