Outlook: Key March Headlines for the Hardcore Gamer

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Watch Dogs

In March, GameStop (NYSE:GME) reported results that were in-line with expectations, while Majesco reported an EPS miss. Further, the Wedbush Video Game Index, our market cap-weighted index of video game companies, was up 1 percent for the month of March. The S&P 500 was up 1 percent and the Russell 2000 was down 1 percent as investors weighed generally positive economic data and the Federal Reserve’s continued commitment to low interest rates against the geopolitical uncertainty caused by the Crimean crisis and wavering consumer confidence.

Take-Two Interactive (NASDAQ:TTWO) shares were up 11 percent as investors appear hopeful that the company will provide clarity into its long-term release slate. GameStop was up 10 percent after reporting in-line Q4:13 results and providing solid guidance. Ubisoft shares were also up 10 percent as it continued to rebound from its October guidance decrease and provided a launch date for the highly-anticipated Watch Dogs. Majesco (NASDAQ:COOL) had the worst month, down 24 percent after reporting a Q1:14 earnings miss and providing bearish FY:14 high-level commentary. Nintendo shares also traded down for the month.

Key March Headlines

o 3/4 – Sony (NYSE:SNE) announced that over 6 million PS4 consoles had sold-through globally as of March 2, with over 13.7 million software units sold (including digital downloads from the PlayStation Store.)

o 3/6 – On the PlayStation blog, Jack Tretton, President and CEO of Sony Computer Entertainment of America (SCEA), announced that he would be stepping down effective March 31 after nineteen years at the company. Although he did not provide a reason for his departure, he announced that it was the result of a mutual agreement with SCEA.

o 3/11 – EA (NASDAQ:EA) released Respawn Entertainment’s Titanfall for the Xbox One and PC to strong reviews, with the Xbox 360 version of the game slated for release on April 8 after two delays. In addition, Microsoft (NASDAQ:MSFT) introduced a Titanfall Xbox One bundle for $499.99 that included a download code for a digital copy of the game, among other perks, essentially bundling the game for free. We view Titanfall as the first must-have game for the Xbox One, and believe that the bundle proved to be very popular as well, particularly after a $50 price cut at certain retailers including Best Buy (NYSE:BBY) and Wal-Mart (NYSE:WMT).

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