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 release is Square Enix’s (SQNXF) “Final Fantasy VII Rebirth,” a sequel to 2020 role-playing game “Final Fantasy VII Remake.” The game releases February 29 exclusively for PlayStation 5 (SONY).

CIRCANA JANUARY: Last week, Circana analyst Mat Piscatella said that projected total market spending on video game hardware, content and accessories in the U.S. grew 15% in January compared to a year ago, reaching $5.1B. The analyst noted that January 2024 was a 5-week period, while January 2023 was a 4-week period. A 15% increase in total projected spending on video game content drove the market’s overall gain. Growth in digital content spending across Console, PC and VR platforms, along with a 5% increase in mobile games spending led the way, according to Sensor Tower. “Palworld” was January’s biggest new release story, ranking 1st in monthly active users on Steam in the US during January according to Circana’s Player Engagement Tracker, while placing 3rd on Xbox platforms behind only “Fortnite” and “Call of Duty HQ.” Epic’s “Fortnite” once again led in monthly active users across both PlayStation 5 and Xbox Series (MSFT) consoles, with “Call of Duty HQ” ranking 2nd across both platforms. January video game hardware spending fell 4% when compared to January 2023, to $378M.

Growth in Xbox Series hardware dollar sales was unable to offset declines across other platforms, Piscatella noted. PlayStation 5 was the best-selling hardware platform of January 2024 in both units and dollars, with Switch (NTDOY) placing 2nd in unit sales and Xbox Series ranking at #2 in dollar sales. With 39 months in market, life-to-date unit sales of PlayStation 5 are now tracking 7% ahead of PlayStation 4’s pace, and 68% above that of PlayStation 3. Spending on video game accessories increased 45% when compared to January 2023, to $246M. Gamepad spending increased by over 50% year-on-year. The PlayStation 5 Dual Sense Edge was the best-selling video game accessory of January in dollar sales. PlayStation Portal was shifted from the Hardware category to Accessories with January data. PlayStation Portal ranked 5th among video game accessories in consumer spending during January.

More specifically on the software side, Piscatella said that six new video game releases appeared on January’s top 20 best-selling tracked titles chart for the U.S. Leading all new releases was Bandai Namco Entertainment’s (NCBDY) “Tekken 8,” which ranked 2nd during January, with both unit and dollar sales growth compared to the June 2017 release of “Tekken 7.” Other new releases ranking among the top 20 tracked titles included Warner Bros. Discovery’s (WBD) “Suicide Squad: Kill the Justice League” at number three, Sega’s (SGAMY) “P3: Persona 3: Reload” at four, Sega’s “Like a Dragon: Infinite Wealth” at seven, Ubisoft’s (UBSFY) “Prince of Persia: The Lost Crown” at number thirteen, and Bandai Namco’s “Jujutsu Kaisen: Cursed Clash” at nineteen. Other top-selling premium games in the U.S. in January include Activision’s “Call of Duty: Modern Warfare 3,” EA‘s (EA) “Madden NFL 24,” Warner Bros. Discovery’s “Hogwarts Legacy,” Sony’s “The Last of Us Part II,” and Nintendo’s “Super Mario Bros. Wonder.”

PLAYSTATION LAYOFFS: On Tuesday, Jim Ryan, President & CEO, Sony Interactive Entertainment, said in a blog post: “The PlayStation community means everything to us, so I felt it was important to update you on a difficult day at our company. We have made the extremely hard decision to announce our plan to commence a reduction of our overall headcount globally by about 8% or about 900 people, subject to local law and consultation processes. Employees across the globe, including our studios, are impacted. These are incredibly talented people who have been part of our success, and we are very grateful for their contributions. However, the industry has changed immensely, and we need to future ready ourselves to set the business up for what lies ahead. We need to deliver on expectations from developers and gamers and continue to propel future technology in gaming, so we took a step back to ensure we are set up to continue bringing the best gaming experiences to the community.”

XBOX GAMES EVERYWHERE: Last week, Microsoft confirmed that the four Xbox exclusive games it previously said would be coming to new platforms were 2018’s “Sea of Thieves,” 2022’s “Pentiment” and “Grounded,” and 2023’s “Hi-Fi Rush.” The company said that “Pentiment” would arrive on PS4, PS5, and Nintendo Switch on February 22; “Hi-Fi Rush” would launch on PS5 March 19; “Grounded” will be available on PS4, PS5, and Switch on April 16; and “Sea of Thieves” will be coming to PS5 on April 30.

The announcement followed weeks of speculation after various media reported that Xbox would be moving many of its exclusive titles to other platforms. During an episode of the Official Xbox Podcast, Microsoft Gaming CEO Phil Spencer confirmed the new strategy as part of efforts to “reach as many players” as the company can. While Spencer noted that four then-unnamed games would be available on new platforms in the near-future, he also said that 2023’s “Starfield” and the upcoming “Indiana Jones and the Great Circle” would not be among them.

OTHER STORIES TO WATCH:

• The successor to the Nintendo Switch will release in March 2025 at the earliest, Nikkei Asia reports (read more)
• At a Pokemon Presents showcase, The Pokemon Company announced that mobile game “Pokemon Trading Card Game Pocket” will arrive in 2024, and that “Pokemon Legends: Z-A” will come out for Switch in 2025 (read more)
• Electronic Arts is cutting a “small number” of workers after shuttering two mobile games, Gamesindustry.biz reports (read more)
• Microsoft is planning an all-digital, white-colored Xbox Series X, eXputer reports (read more)