Video Game Makers Up On Strong Sales Data, Brean Capital Sees Expanding User Base For 2015

Shares of video game makers Electronic Arts Inc. EA, Activision Blizzard, Inc. ATVI and Take-Two Interactive Software, Inc. TTWO traded higher at Friday’s open following strong year-end sales data from NPD.

Brean Capital analyst Todd Mitchell noted that “NPD reported total Video Game retail sales of $3.24 billion in December, down just 2 percent from $3.28 billion in December 2013 and better than our expectations for an 8 percent decline.”

The results “were underpinned by a 4 percent decrease in hardware revenue to $1.31 billion and a 2 percent decline in software sales to $1.25 billion, offset partially by 9 percent growth from accessories to $681 million,” according to the analyst note.

Mitchell felt the strong fundamentals were a set up for a digital ramp in 2015. “Total industry digital sales in December grew 11 percent to $1.2 billion from $1.1 billion a year ago, according to SuperData research...We believe this growth is being driven by an expanding next-gen user base and better execution from major publishers for online game-modes.”

The firm maintained a Buy rating on all three stocks.

Electronic Arts Inc. gave back its earlier gains and recently traded at $46.44, down 0.42 percent.

Activision Blizzard, Inc. was the strongest of the three stocks Friday, recently trading at $19.70, up 6.20 percent.

Take-Two Interactive Software, Inc. recently traded at $28.08, up 1.37 percent.