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Microsoft's Project Scarlett, EA Updates To 'Apex Legends' Highlight Opening Of E3

Microsoft's Project Scarlett, EA Updates To 'Apex Legends' Highlight Opening Of E3

Microsoft Corporation (NASDAQ: MSFT)’s next-generation gaming console and upcoming upgraded content for Electronic Arts Inc. (NASDAQ: EA)’s "Apex Legends" highlighted the start of the Electronic Entertainment Expo, or E3, according to Bank of America Merrill Lynch analyst Justin Post.

Microsoft kicked off the video game industry’s showcase trade show by announcing that the new console, code-named Project Scarlett, will be available around the holidays in 2020.

Post said anticipation of new consoles next year will likely be the big positive take-away from the show for U.S. game companies as it is expected to be a down year for new title releases in the big game franchises.

Microsoft says the console will be four times more powerful than the previous generation, Xbox One X, but didn’t disclose what it will cost.

Halo Infinite Coming

Microsoft also said it will launch "Halo Infinite" next year, and that its cloud streaming platform, called Project xCloud, will test publicly in October, allowing gamers to stream titles to mobile devices.

"Halo Infinite" is likely the most anticipated of the company’s upcoming games, along with “Cyberpunk 77,” “Gears 5,” and “Borderlands 3,” Post said.

Also at E3, Microsoft announced it's acquiring game studio Double Fine Productions as it continues to build its in-house content development capabilities.

EA Play

Post highlighted EA’s “Play” event, at which the company gave new details on its “Star Wars Jedi Fallen Order,” and its sports titles and new content coming to some game franchises.

EA said Apex Season 2 will launch July 2, with a new weapon and a new legend, called "Wattson," along with other new content, Post said.

“While we believe some gamers were looking for more than one new weapon and Legend, early reviews on Wattson are positive, and we believe new missions, gameplay styles and more content could help to reaccelerate engagement,” Post wrote in the note. He has a Buy rating on EA with a target price of $118.

Post said the season 2 launch will be an important marker for EA and its ability to hit the $300 million to $400 million in Apex revenue the company projected in its 2020 guidance.

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Photo courtesy of Apex Legends

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