Skip to main content
The Globe and Mail
Support Quality Journalism.
The Globe and Mail
First Access to Latest
Investment News
Collection of curated
e-books and guides
Inform your decisions via
Globe Investor Tools
Just$1.99
per week
for first 24 weeks

Enjoy unlimited digital access
Enjoy Unlimited Digital Access
Get full access to globeandmail.com
Just $1.99per week for the first 24weeks
Just $1.99per week for the first 24weeks
var select={root:".js-sub-pencil",control:".js-sub-pencil-control",open:"o-sub-pencil--open",closed:"o-sub-pencil--closed"},dom={},allowExpand=!0;function pencilInit(o){var e=arguments.length>1&&void 0!==arguments[1]&&arguments[1];select.root=o,dom.root=document.querySelector(select.root),dom.root&&(dom.control=document.querySelector(select.control),dom.control.addEventListener("click",onToggleClicked),setPanelState(e),window.addEventListener("scroll",onWindowScroll),dom.root.removeAttribute("hidden"))}function isPanelOpen(){return dom.root.classList.contains(select.open)}function setPanelState(o){dom.root.classList[o?"add":"remove"](select.open),dom.root.classList[o?"remove":"add"](select.closed),dom.control.setAttribute("aria-expanded",o)}function onToggleClicked(){var l=!isPanelOpen();setPanelState(l)}function onWindowScroll(){window.requestAnimationFrame(function() {var l=isPanelOpen(),n=0===(document.body.scrollTop||document.documentElement.scrollTop);n||l||!allowExpand?n&&l&&(allowExpand=!0,setPanelState(!1)):(allowExpand=!1,setPanelState(!0))});}pencilInit(".js-sub-pencil",!1); // via darwin-bg var slideIndex = 0; carousel(); function carousel() { var i; var x = document.getElementsByClassName("subs_valueprop"); for (i = 0; i < x.length; i++) { x[i].style.display = "none"; } slideIndex++; if (slideIndex> x.length) { slideIndex = 1; } x[slideIndex - 1].style.display = "block"; setTimeout(carousel, 2500); } //

The big question for U.S. gaming companies when they report results in the coming days is whether players will remain hooked on “Call of Duty,” “Grand Theft Auto” and “NBA 2K21” after life returns to some normalcy following vaccine rollouts.

Huge demand during the pandemic for game titles propped up results for Electronic Arts Inc, Activision Blizzard Inc and Take-Two Interactive Software Inc over the past few quarters. Most analysts are bullish and think the sales momentum can be sustained; some are a bit more skeptical.

John Patrick Lee, ETF Product Manager at VanEck, said “return to normalcy risk” is a very real risk to the video game market right now, with widespread vaccinations and lowering case counts in some countries.

Story continues below advertisement

“This could potentially mean that restaurants, bars, movie theaters, sports events, and other options are going to take video game consumers away from the digital world and into the real world.”

THE CONTEXT

The video gaming industry has seen a surge in sales over the past year as gamers remained indoors, but with the roll-out of COVID-19 vaccines and easing of restrictions, people are venturing outdoors.

The gaming frenzy drove worldwide console sales to a record $56 billion in 2020. High demand also fueled a global shortage in semiconductor chips that has roiled the industry.

Moreover, publishers also need to keep refreshing their top-selling titles such as “Overwatch,” “Battlefield” and “Grand Theft Auto” to attract new gamers and retain old ones, as they face fierce competition.

Activision, which is expected to report after the market close on Tuesday, is anticipated to post a rise in revenue as it continued to benefit from its popular title “Call of Duty: Black Ops Cold War.”

Similarly, analysts expect EA to also come out with a strong picture after its acquisitions of Codemasters, the publisher behind top racing titles like “F1” and “Dirt,” and the “Kim Kardashian: Hollywood” creator Glu Mobile.

“Video games are as popular as ever. We don’t see that changing any time soon,” Jefferies analysts wrote in a note.

Story continues below advertisement

THE FUNDAMENTALS

* The Redwood City, California-based EA is expected to report a 14.5% increase in revenue to $1.39 billion from $1.21 billion a year ago, according to the mean estimate from 27 analysts, based on Refinitiv data.

* Analysts expect Santa Monica, California-based Activision Blizzard to show a rise of 17% in first-quarter revenue to $1.78 billion from $1.52 billion, a year ago.

* However, New York-based Take-Two is expected to report a 9.0% decrease in revenue to $664 million from $729.42 million last year, according to Refinitiv data.

WALL STREET SENTIMENT

* The average rating of 34 analysts on Electronic Arts is “buy” and median PT is $162, according to Refinitiv data.

* Wall Street is mostly bullish on Activision Blizzard with 29 analysts rating the stock “buy” or above, 4 “hold” and 1 “strong sell”; median PT is $115.

* Current rating of 29 analysts on Take-Two is “buy” and median PT is $223, according to Refinitiv data.

Story continues below advertisement

Be smart with your money. Get the latest investing insights delivered right to your inbox three times a week, with the Globe Investor newsletter. Sign up today.

Your Globe

Build your personal news feed

  1. Follow topics and authors relevant to your reading interests.
  2. Check your Following feed daily, and never miss an article. Access your Following feed from your account menu at the top right corner of every page.

Follow topics related to this article:

View more suggestions in Following Read more about following topics and authors
Report an error
Tickers mentioned in this story
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

If you do not see your comment posted immediately, it is being reviewed by the moderation team and may appear shortly, generally within an hour.

We aim to have all comments reviewed in a timely manner.

Comments that violate our community guidelines will not be posted.

UPDATED: Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies