HSBC analyst Mohammed Khallouf downgraded Electronic Arts (EA) to Hold from Buy with an unchanged price target of $191. EA being bought leaves Take-Two (TTWO) as the last independent “AAA” games publisher, notes the analyst, who judges the impact of the EA deal as “net positive” for Take-Two given that it adds to the scarcity value of it public markets listing and highlights it as an attractive potential future target for M&A. However, the firm also cautions that a larger role for PIF in EA could “increase the financial firepower of a main competitor” at a time when the cost of producing and marketing video games keeps climbing.
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