What You Missed This Week in Video Games

“Game On” is The Fly’s weekly recap of the stories powering up or beating down video game stocks.

NEW RELEASES: This week’s biggest new game release is Activision’s (MSFT) “Call of Duty: Modern Warfare III,” which launches November 10 for Xbox One, Xbox Series X/S, PC, PlayStation 4 (SONY), and PlayStation 5. Also out this week is Sega’s (SGAMY) “Like a Dragon Gaiden: The Man Who Erased His Name,” a spinoff in the “Like a Dragon” franchise. THe title launches November 9 for PS4, PS5, PC, Xbox One, and Xbox Series X/S.

NINTENDO RESULTS: Nintendo (NTDOY) reported year-over-year increases in both half operating profit and revenue in the first half of its fiscal year, with hardware units sold increasing 2.4% during the period. “Regarding the Nintendo Switch business during the second quarter, each title released this fiscal year has sold well, with The Legend of Zelda: Tears of the Kingdom posting sales of 19.50 million units, and Pikmin 4 posting sales of 2.61 million units,” the company said. “In addition, the April release of The Super Mario Bros. Movie positively impacted sales of Mario related titles, such as Mario Kart 8 Deluxe which recorded sales of 3.22 million units. Sales of other titles also continued to grow steadily, bringing the total number of million-seller titles during this period to 16, including titles from other software publishers. As a result of these factors, hardware sales increased 2.4% year-on-year to 6.84 million units, and software unit sales increased 1.8% year-on-year to 97.08 million units. Turning to our digital business for the dedicated video game platform, downloadable versions of packaged software for Nintendo Switch sold well, and sales related to add-on content and Nintendo Switch Online also increased. Digital sales reached 217.5 billion yen, up 15.8% year-on-year, helped also by the depreciation of the yen. In the mobile and IP-related business, sales totaled 55.0 billion yen, up 133.3% year-on-year, bolstered mainly by the generation of revenue related to The Super Mario Bros. Movie during this term.”

Looking ahead, the Japanese gaming giant raised its FY24 revenue guidance to JPY1.58T from JPY1.45T. “For hardware, by continuing to convey the appeal of Nintendo Switch, we try not only to put one system in every home, but several in every home, or even one for every person,” the Switch maker said. “Another objective is to continually release new offerings so more consumers keep playing Nintendo Switch even longer and we can maximize hardware sales. For software, we released Super Mario Bros. Wonder in October as the first entirely new installment in the side-scrolling Super Mario Bros. series in almost 11 years. In that same month we released Detective Pikachu Returns, and heading into the holiday season we plan to release more titles, including WarioWare: Move It! and Super Mario RPG. In addition, The Indigo Disk, the second part of The Hidden Treasure of Area Zero add -on content for Pokemon Scarlet and Pokemon Violet, is scheduled for release in December. Other software publishers also plan to release a wide variety of titles, and we will work to invigorate the platform by supplementing existing titles with a continuous stream of new titles and add-on content.”

ELECTRONIC ARTS RESULTS: Last week, Electronic Arts (EA) reported better-than-expected earnings per share and net bookings for the second quarter, with CEO Andrew Wilson saying the quarter was “strong” and bolstered by the launch of “EA SPORTS FC.” “EA SPORTS strength, driven by new releases and ongoing live services, delivered Q2 results ahead of expectations,” added Stuart Canfield, CFO of EA. “We remain focused on delivering for our growing player communities and building upon the momentum across our portfolio, while prioritizing investments that execute against our largest opportunities to drive long term growth.”

Looking ahead, the game maker provided conservative guidance for Q3 earnings but an in-line outlook for quarterly net bookings. Meanwhile, the company reiterated its FY24 net bookings guidance.

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OTHER STORIES TO WATCH:

• Ubisoft (UBSFY) told Kotaku it will cut 124 total positions in Canada (read more)
• Microsoft and Inworld AI are partnering to build AI video game dialogue and narrative tools at scale (read more)
• UBS analyst Kenneth Fong assumed coverage of Tencent (TCEHY) with a Buy rating and HK$419 price target (read more)