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Can Holiday Sales Take Game Developers to the Next Level?
The introduction of new software titles is one of the most important growth drivers for video game developers. This is particularly true during the holiday season, when full-year results can often prove largely dependent upon a product’s performance in the December interim. This year, there is a wide variety of games slated for launch during the holiday season.
Several important action, role-playing, and first-person shooter games have been introduced in recent weeks. Perhaps most noteworthy is Activision Blizzard’s (ATVI) Call of Duty: Modern Warfare 2. This first-person shooter game has been one of the most anticipated titles of the season. Revenues from the first 24 hours of sales totaled $310 million, making this game the biggest entertainment launch in history. This title has also received an excellent critical reception. Meanwhile, Take-Two Interactive’s (TTWO) Rockstar Games has launched Grand Theft Auto: Episodes from Liberty City. The introduction of this title, which includes two unique stand-alone games, ought to boost results at Take-Two going forward. In addition, Take-Two subsidiary 2K Games should benefit from the popularity of role-playing shooter game Borderlands, which was introduced in October. Elsewhere, Electronic Arts’ (ERTS) recently-launched role-playing game Dragon Age: Origins has been well-received by critics.
Sports titles remain highly popular in the video game universe. Electronic Arts has built a very strong presence in this arena, marketing games under the EA Sports label. New titles for each sport are released every year, and avid sports fans often feel compelled to purchase the latest edition. Recently released games such as FIFA ’10, NHL ’10, NBA Live ’10 and Madden NFL ’10 should remain popular throughout the holiday season, and continue to benefit EA’s revenues going forward. Meanwhile, Take-Two Interactive has launched the latest installments of its basketball and hockey franchises, NBA 2K10 and NHL 2K10. Elsewhere, Activision Blizzard has recently introduced Tony Hawk: Ride, the latest installment of the popular skating series. In addition, THQ (THQI) ought to benefit from the introduction of WWE SmackDown vs. Raw 2010 and MX vs. ATV Reflex this holiday season.
The popularity of Guitar Hero and its successors in recent years has underscored the relevance of the video game music genre, and several important titles have been released for this holiday season. Guitar Hero 5 and DJ Hero should underpin revenue growth at Activision Blizzard in the coming quarters. Both games have received positive reviews, although DJ Hero is particularly unique in this genre, offering entirely new music, game play and peripherals. Elsewhere, The Beatles: Rock Band should remain popular going forward. The game’s soundtrack consists of 45 songs from the popular British rock group, and it features virtual depictions of band members performing the songs. This title has been developed by Viacom (VIA,VIA-B) subsidiary MTV Games, and distributed by Electronic Arts. In addition, Take-Two Interactive launched Beaterator in late September. This title is a professional-level, portable studio that guides users through the process of constructing beats and songs.