Video Game Stock Roundup: Mergers and Game Launches in Focus

The last five trading sessions turned out to be a cheerful period for most of the video game stocks. In the wake of Thanksgiving and new games launches, most of the stocks traded bullish in the stocks market except for Zynga, Inc. (ZNGA), Microsoft Corporation’s (MSFT) and Glu Mobile, Inc. (GLUU), which registered some dips.

One of the major events over the past weeks was the completion of the much-awaited merger of Scientific Games Corp. (SGMS) with Bally Technologies, Inc. Further, King Digital Entertainment plc’s (KING) official launch of Candy Crush Soda Saga and the foray of Take-Two Interactive Software Inc.’s (TTWO), subsidiary Double Take, LLC into graphic novels remained in focus.

Top Stories Over the Last Week

1. Microsoft’s video game production unit Microsoft Studios released the latest matchmaking patch for Halo: The Master Chief Collection. The company has made many improvements including fixing interface bugs, party system issues and enhancement of the overall stability and performance of the game.

2. Scientific Games recently completed its merger with Bally Technologies. The $5.1 billion deal included the latter’s debt refinancing of approximately $1.8 billion. The recent move is expected to diversify Scientific Games’ product portfolio and expand its global footprint. Moreover, it eliminates one of its closest competitors, which will help in expanding market share. (Read More: Scientific Games Up on Bally Technologies Merger Closure)

3. Apple Inc. (AAPL) launched a two-week campaign as part of its efforts to fight AIDS. In this regard, Apple partnered with video gaming companies like Electronic Arts Inc. and Zynga to incorporate their apps in the campaign. Titles featuring in the campaign include Zynga’s Farmville, EA’s FIFA15, Sims and Angry Birds, to name a few. The collaboration will support Apple’s AIDS campaign, while promoting the video gaming stocks involved in this campaign.

4. Activision Blizzard, Inc. recently released Geometry Wars 3: Dimensions. While the game is similar to the Geometry Wars series, the new 3D action and gameplay mode are its USP. In addition, the game will offer five unique companion drones, new power-ups, electrifying boss battles and community leaderboards.

5. King Digital Entertainment organized celebrity events in New York and London for the official launch of its Candy Crush Soda Saga mobile game. Following the massive hit game Candy Crush Saga (rated No. 2 mobile game on the app stores and generating $260 million in revenue in the last quarter) we believe the launch will be able to lure new players and strengthen the company’s long-term prospects.

Performance

The following table shows the price movements of the major video gaming players over both the past five trading days as well as the last six months:

Over the last five days, Take-Two Interactive and Activision Blizzard remained the top gainers with a respective growth of 4.5% and 3.4% in stock prices. Activision Blizzard gained with new game launches, while Double Take, LLC’s launch of its first three graphic novels— Rise, Soul and Insurrection — boosted Take-Two. On the flip side, the stock that lost the most over this time period was Zynga which dropped almost 2.2%.

Over the six-month period, however, NetEase, Inc. gained the maximum — nearly 23.3% — while Glu Mobile lost the most registering a decline of 43.7%. We believe that growing competition from established players and declining popularity of its hit game Kim Kardashian: Hollywood are affecting the company’s market value.

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