Zacks Analyst Blog Highlights Nintendo, Sony Group, Microsoft, Activision Blizzard and Electronic Arts

For immediate release

Chicago, IL – May 18, 2022 – Zacks.com announces the list of stocks featured in the analyst blog. Every day, Zacks Equity Research analysts discuss the latest news and events impacting stocks and financial markets. Stocks recently featured in the blog include: Nintendo (NTDOY), Sony Group Corp. (SONY), Microsoft Corp. (MSFT), Activision Blizzard, Inc. (ATVI), and Electronic Arts (EA).

Here are the highlights from Tuesday’s analyst blog:

Can video game sales rebound to COVID-19 highs?

Video game sales in the United States jumped in April, but the industry has not been in the best of health. Video games hit record sales during the peak of the pandemic, and several months after, but suddenly stalled.

As new games are released, sales have slowed somewhat this year. One of the biggest challenges is the supply chain crisis, but there are several other difficulties that are driving down sales. Despite all of this, video game makers are sparing no effort to bounce back to previous highs.

Rebound in video game sales

After experiencing a few months of declining sales, the video game market rebounded in April. According to industry-tracking firm The NPD Group, April turned out to be a great month, with console hardware sales jumping 16% year-over-year from $295 million to $343 million.

However, overall spending on video game hardware, accessories and content fell 8% year-over-year to $4.3 billion, indicating that the industry is facing challenges. Also since the start of the year, consumer spending on video games is down 8%.

The decline comes despite some great accomplishments from several video game makers. nintendo‘s Switch has surpassed its biggest rival’s lifetime sales figures Sony Group Corp.‘s PlayStation 4, making it the fourth best-selling console in US history.

However, PlayStation is still number 1 in terms of dollar sales. The PlayStation 5 led US dollar hardware sales in April, followed by Microsoft Corp.of the Xbox series. Year-to-date, Xbox continues to lead overall hardware sales in dollar terms. Microsoft has a Zacks rank of #3 (maintain). You can see the full list of today’s Zacks #1 Rank (Strong Buy) stocks here.

On the other hand, seasoned players like Activision Blizzard, Inc. continued to generate decent sales. ATVI’s Call of Duty: Vanguard ranked number 6 in video game hardware sales in April, while it ranked number 7 in the top 20 best-selling games of April. Nintendo’s Kirby and the Forgotten Land ranked eighth, while electronic arts‘ Madden NFL 22 placed ninth.

Upcoming challenges

The video game industry has seen a surge in sales following the COVID-19 outbreak. While millions of people remained confined to their homes and outdoor entertainment remained closed for months, people didn’t have much choice.

This saw video game sales skyrocket during this time as in-theatre entertainment was the only option left for millions of people. Sales hit record highs in 2020 and early 2021. Additionally, major video game makers launched a range of new games and consoles, further boosting sales.

At the turn of 2021, people started getting vaccinated and outdoor entertainment venues started to reopen. Experts had predicted that sales would decline. However, the launch of new titles from major players in the industry helped boost sales. This made 2021 a great year for video game makers.

Supply chain crisis dampens sales in 2022

Things actually started to change from the start of 2022. Sales have been declining year over year for the past few months. One of the main reasons is the supply chain crisis, which is affecting other industries as well.

Additionally, the global shortage of semiconductors has hampered video game production, further hurting sales. Sales fell in both the first quarter of 2022 and in April.

However, the picture is not that bleak and this year may still prove to be one of the best for video game sales, with a whole range of big titles releasing in the second half of the year. Several titles that were slated for release in 2021 will debut this year, giving players more choice. Additionally, once the supply chain crisis passes, sales are expected to pick up.

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Past performance is not indicative of future results. The potential for loss is inherent in any investment. This document is provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold any security. No recommendation or advice is given as to whether any investment is suitable for any particular investor. It should not be assumed that investments in the securities, companies, sectors or markets identified and described have been or will be profitable. All information is current as of the date hereof and is subject to change without notice. The views or opinions expressed may not reflect those of the company as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management of securities. These returns come from hypothetical portfolios composed of stocks with Zacks Rank = 1 that have been rebalanced monthly without transaction fees. These are not the returns of actual stock portfolios. The S&P 500 is an unmanaged index. To visit https://www.zacks.com/performance for more information on the performance figures displayed in this press release.

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Microsoft Corporation (MSFT): Free Stock Analysis Report

Activision Blizzard, Inc (ATVI): Free Stock Analysis Report

Electronic Arts Inc. (EA): Free Stock Analysis Report

Nintendo Co. (NTDOY): Free Stock Analysis Report

Sony Corporation (SONY): Free Stock Analysis Report

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