Market Overview

Video Game Stocks Continue To Trade Lower Following Launch Of 'Apex Legends' Season 2

Share:
Video Game Stocks Continue To Trade Lower Following Launch Of 'Apex Legends' Season 2

After closing last week on a down note, video game stocks such as Electronic Arts (NASDAQ: EA), Activision Blizzard (NASDAQ: ATVI) and Take-Two Interactive (NASDAQ: TTWO) are seeing downward pressure in Monday's session.

Why The Move?

Needham’s analyst Laura Martin told Benzinga the disappointing launch of "Apex Legends" Season 2 is pulling other video game stocks down as it implies "Fortnite" is a "harder competitor to beat than originally thought."

"I think EA is down on the disappointing launch of 'Apex Legends' [Season] 2 on July 2, based on Twitch player data. It's pulling other public gaming cos [companies] down on this news because it implies that Fortnite (private) is a harder competitor to beat than originally thought," said Martin.

According to Digital Trends, "Apex Legends" Season 2 was supposed to take battle royale shooter to greater heights, but so far, it has failed to meet expectations as a worthy competitor to "Fortnite."

One analyst disagrees that "Apex Legends" Season 2 should be a cause for concern in the video gaming sector. Wedbush analyst Michael Pachter notes, “some think 'Apex Legends' is performing poorly because of lack of commentary from the company. I disagree, think it's doing just fine."

Longer-Term Issues?

BMO Capital Markets’ Gerrick Johnson told Benzinga video game stocks have been under pressure in general as gains from the digital transformation are either already harvested or occurring at a slower rate and notes “uncertainty and fundamental shifts” are behind the weakness.

"I think there is a longer conversation here. VG [video game] companies have been under pressure in general as gains from the digital transformation are either already harvested or occurring at a slower rate. But also some uncertainty and fundamental shifts,” said Johnson.

Johnson believes the popularity of free-to-play PC and console gains like "Fortnite" and "Apex Legends" have made the industry, once again, more hit driven.

At time of publication, Electronic Arts shares were trading down 1%, Activision Blizzard shares were down 3.5% and Take-Two shares were down 2.5%.

Related Links:

Turtle Beach Continues Partnership With Ali-A, The 'Most-Watched' Gamer on YouTube

Vislink Shares Double Following Product Deployment At Battle Royale Esports Arena

Photo courtesy of Respawn Entertainment.

Latest Ratings for EA

DateFirmActionFromTo
Aug 2020NeedhamMaintainsBuy
Jul 2020UBSMaintainsBuy
Jul 2020Credit SuisseMaintainsOutperform

View More Analyst Ratings for EA
View the Latest Analyst Ratings

 

Related Articles (ATVI + EA)

View Comments and Join the Discussion!

Posted-In: Apex Legends Fortnite Laura MartinAnalyst Color Top Stories Exclusives Analyst Ratings Tech Best of Benzinga

Latest Ratings

StockFirmActionPT
PRTKHC Wainwright & Co.Maintains19.0
MCRBHC Wainwright & Co.Maintains41.0
EOLSHC Wainwright & Co.Maintains8.0
PRTSSmall Cap Consumer ResearchMaintains16.0
FIXXHC Wainwright & Co.Maintains30.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com