U.S. videogame publishers tap proven titles to fight weak economy
By Tiyashi Datta and Aditya Soni
(Reuters) - Popular titles from Electronic Arts-owned "FIFA" to Activision Blizzard's "Call of Duty" are propping up sales for U.S. videogame publishers in a turbulent economy, quelling concerns that a looming recession may impede growth.
Take-Two Interactive Software Inc on Wednesday rounded off a strong March quarter for the sector that saw its three major players post net bookings growth of between 11% and 66%.
The results signal resilience in the industry after it struggled last year with a slowdown in demand following a boom driven by stay-at-home orders imposed during the COVID-19 pandemic.
"While consumers continue to exercise restraint with their purchasing behaviors, they prioritize blockbuster franchises and titles that offered great value," Take-Two CEO Strauss Zelnick said on an earnings call.
Take-Two shares rose 10% on Thursday.
The company said "NBA 2K23", "Grand Theft Auto V" and "Grand Theft Auto Online" were some of the top contributors to its net bookings growth in the reported quarter.
"NBA 2K23", "Call of Duty: Modern Warfare 2" and "FIFA 23" were among the top console games by revenue in the first three months of 2023, according to data from market research firm NewZoo.
"Legacy titles have proven themselves in the market and reduce the chance for consumers that they buy a crappy game," said Joost Van Dreunen, a lecturer at New York University's Stern School of Business.
The rise of multi-player gameplay is also making titles more sticky for players who do not want to lose their achievements and social connections, he added.
Some analysts said the momentum could continue, with EA forecasting annual bookings in line with estimates as it gears up to launch a rebranded version of its soccer franchise this year.
While Take-Two's current-year outlook was poor due to a thin release slate, the company said it would launch several "groundbreaking titles" in calendar 2024, fanning expectations for the release of the long-awaited sequel to "GTA V".
The company forecast net bookings of more than $8 billion for next year, which was above analysts' estimates.
"It (the GTA VI release) would be a watershed moment for the category of open-world games," said MoffettNathanson analyst Clay Griffin.
"Tens and tens of millions of units would be sold immediately, and a new or completely refreshed GTA: Online would redefine what a modern 'metaverse' really looks like."
(Reporting by Tiyashi Datta and Aditya Soni in Bengaluru; Editing by Devika Syamnath)