Black Friday and Cyber Monday: digital sales of games rising, Take-Two and Activision Blizzard are winners over weekend
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Black Friday and Cyber Monday: digital sales of games rising, Take-Two and Activision Blizzard are winners over weekend

We’ve already reported that this year’s holiday weekend, comprising of Thanksgiving, Black Friday, Cyber Monday, and the days in-between, was a roaring success. Now, we want to take a quick look at what it means for the video game industry. Here’s the short version: it’s very good news! That’s for the industry as a whole, but also for two game developers and publishers held in Dominion’s Global Trends Luxury Fund: Take-Two Interactive and Activision Blizzard.

Despite outperforming over the weekend, neither company’s share price has moved much over the last five days

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Source: Yahoo Finance

SuperData (a Nielsen company that reports exclusively on the video game sector) said that overall digital spending on video games rose 14.3% from the same period in the previous year. They singled out recent releases from Activision and Take-Two as drivers and beneficiaries of that growth (the titles in question are Call of Duty: Black Ops III and Red Dead Redemption II, respectively). Console revenue rose by 24.5% to $1 billion, and premium PC sales increased 18.3% to $586 million.

Joost Van Dreunen, SuperData’s managing director, made the following comment: “Video games have become a layered experience. Beyond just a big, loud launch, blockbuster titles today rely on a variety of different consumer touchpoints, including live streaming video, real-life events, digital sales, and crossplay multiplayer gameplay. Large publishers like Activision and Take-Two have managed to incorporate these new avenues into their Q4 releases and the numbers show that audiences have responded in kind.”

There’s a caveat to all this: higher online sales taken in isolation don’t necessarily mean companies are selling loads more video games (although other trends in gaming, and sales figures released after recent releases, certainly imply it). It might simply show that the same amount of purchases is being made by gamers who prefer to do their shopping online than in-store. Even in that case, this would be great news. The trend towards digitisation is a boon to gaming companies who don’t have to share digital revenue with middle-men in brick-and-mortar stores. It’s also indicative of a gaming culture that lends itself to better business models, like subscription services and in-game purchases.

According to SuperData, digitisation is ploughing on ahead: 42% of gamers buy “most or all” of their games digitally. Just 27% say the same about physical copies. It’s clear which way consumers are moving, it’s clear that they still have a significant distance to go in that direction, and – most of all – it’s clear that this is great news for gaming companies.

Disclosure
Dominion holds Take-Two Interactive and Activision Blizzard in its Global Trends Luxury Fund.


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The views expressed in this article are those of the author at the date of publication and not necessarily those of Dominion Fund Management Limited. The content of this article is not intended as investment advice and will not be updated after publication. Images, video, quotations from literature and any such material which may be subject to copyright is reproduced in whole or in part in this article on the basis of Fair use as applied to news reporting and journalistic comment on events.