CHICAGO, July 18, 2011 /PRNewswire/ -- Zacks.com announces
the list of stocks featured in the Analyst Blog. Every day the
Zacks Equity Research analysts discuss the latest news and events
impacting stocks and the financial markets. Stocks recently
featured in the blog include: Take-Two Interactive Software
Inc. (Nasdaq: TTWO), THQ Inc. (Nasdaq: THQI), Sony
Corp. (NYSE: SNE), Activision Blizzard Inc. (Nasdaq:
ATVI) and Microsoft Corp (Nasdaq: MSFT).
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Here are highlights from Friday's Analyst Blog:
Gaming Industry Declines Again
The videogame industry continued its negative run, as U.S retail
sales declined for the second straight month. In June 2011, sales were down 10% from the
comparable previous year to $1.03
billion, according to market research firm, The NPD
Group.
A lower number of game releases coupled with some disappointing
game reviews were primarily responsible for the dismal results. The
poor reviews deterred the sales of a few games that were aimed for
hardcore gamers like Take-Two Interactive Software Inc.'s
(Nasdaq: TTWO) Duke Nukem Forever and THQ Inc.'s
(Nasdaq: THQI) Red Faction: Armageddon.
In June 2011, software sales
dropped 12% to $469.5 million.
Including PC games, total software sales fell 10% to $508.9 million. Amid this grim picture, Take-Two
Interactive Software Inc's titles managed to hold on to the lead
positions, as its "L.A.
Noire" snatched the top spot for the second month in a
row and was followed by "Duke Nukem Forever". Though the
latter title received poor reviews, it still managed to hang on to
the second position.
Sony Corp.'s (NYSE: SNE) "Infamous 2" was in third
place. Disney Interactive Studios' Lego Pirates of the
Caribbean: The Video Game and Nintendo's Legend of
Zelda: Ocarina of Time 3D grabbed the fourth and fifth
positions, respectively. Long time favorite Call of Duty: Black
Ops, by Activision Blizzard Inc. (Nasdaq: ATVI) managed
the sixth spot.
Hardware sales were down 9% to $366.6
million. Microsoft Corp's (Nasdaq: MSFT) Xbox 360
sold 507,000 units followed by Sony's PS3 and Nintendo's Wii that
sold 276,000 and 273,000 units respectively.
Accessories sales were down 11% from the previous year to
$158.9 million.
Despite the decline in sales for two consecutive months, market
researcher Gartner Inc. recently reported that the video game
industry is poised for strong growth in 2011. Gartner expects the
video game industry to grow 10.4% to $74.4
billion from the 2010 level of $67.0
billion.
Gartner estimates that software spending in 2011 will be roughly
$44.7 billion (60.4% of total
spending), and it will continue to dominate the overall gaming
market in the next five years as it absorbs almost two-thirds of
consumers' gaming budgets. Spending on gaming hardware and online
gaming are expected to reach $17.8
billion and $11.9 billion,
respectively, in 2011.
Gartner expects video game related spending to reach
$112.0 billion by 2015, with 50.4% of
spending on software ($56.5 billion).
Over the next five years, the share of gaming hardware as a
percentage of total spending on gaming will remain constant, while
spending on the fast-growing online gaming segment outpaces
software spending. Developers have already started shifting their
business model and are increasingly announcing digitized versions
of games.
We also believe that the tremendous success of online social
gaming will further change the dynamics of the video game industry
going forward. We believe that the social gaming market is well
positioned for continued growth, primarily attributable to its
casual, social and interactive environment compared to the more
conventional platforms.
However, the economic slowdown has taken its toll. Consumer
spending remains weak to date and the lack of new game releases has
not helped.
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