The video game world has been desperate for new game releases for a few years, but things could look a lot different going into 2023 and 2024 as a bunch of new titles and sequels are expected. Over the past few years, lots of highly anticipated games were delayed.
Recently at the Tokyo Game Show, Sony Group Corp. and Nintendo Co Ltd. (held by the fund) said that 2023 will be one of the biggest years for game releases. As games have been delayed, it has impacted sales at gaming companies. But gamers can expect several new releases from some of the biggest video game publishers.
Nintendo and Sony
Nintendo is planning to release Zelda: Tears of the Kingdom, Fire Emblem: Engage, and Pikmin 4. Sony’s video game lineup for 2023 includes Hogwarts Legacy, Marvel’s Spider-Man 2, Final Fantasy XVI, Stellar Blade, and Synduality. Sony’s new virtual reality system, dubbed PSVR2, is also expected to be released in early 2023 and reports indicate that there are more than 20 games for that system.
Activision Blizzard and Capcom Co. Ltd.
Other new video game releases include Diablo IV from Activision Blizzard Inc., Street Fighter VI from Capcom Co. Ltd., and Forspoken from Square Enix Holdings Co Ltd.1
Take-Two Interactive Software Inc.
Take-Two Interactive Software Inc.’s flagship label, Grand Theft Auto VI was in the headlines recently after a series of leaked videos showed an early build of the game. This was worrisome since Grand Theft Auto VI is one of the most financially successful games for the company and drives millions of dollars of revenue each year.
Grand Theft Auto VI will be released in the fiscal year 2025, which begins in April 2024 for Take-Two Interactive Software.2
Lastly, Roblox Corp., a virtual gaming platform creator, announced that it plans to introduce immersive ads to its virtual worlds. The CEO of the company said that Roblox has been dreaming about these ads for 15 years.
In the past, Roblox has had rewarding partnerships with brands like Ralph Lauren and Chipotle, and has offered users branded games, virtual concerts, and items. However, with immersive ads, the company plans to have players interact with advertisements inside of games.3
CD Projekt S.A.’s New Releases
CD Projekt S.A., Poland’s biggest computer video game studio, pulled through stronger than expected earnings in 2021. This comes as the company’s flagship and significantly anticipated game Cyberpunk 2077 didn’t do so well.
Cyberpunk 2077 was released in late 2020 and cost the company 1.2 billion-zloty (CAD $335.8 million). Initially, there were many client complaints and glitches in the game. Furthermore, the game was also suspended from Sony’s PlayStation store. It’s worth noting that the company has since fixed most of the issues.
CD Projekt S.A. is also planning the release of Witcher 3: Wild Hunt. This game is in its early stage but recently ran into problems according to its 2022 plans.4
Playstudios’s Acquisition of Brainium
PLAYSTUDIOS, Inc, a developer and publisher of free-to-play casual video games for mobile and social platforms, announced the acquisition of Brainium for $70 million in cash, with a few conditions.
Branium is one of the long-standing publishers of casual games like Solitaire, Spider Solitaire, Sudoku, and Mahjong. With this acquisition, PLAYSTUDIOS’s game portfolio would increase and double its average daily active user count.
Jason Hahn, EVP of Corporate and Business Development of PLAYSTUDIOS said that this acquisition “checks all the boxes on our growth strategy.”5
Investing in Video Games with HERO ETF
Interested in a diversified approach to investing in video games? Evolve E-Gaming Index ETF (TSX Ticker: HERO) may be the right investment for you. HERO ETF gives investors access to equity securities of companies, listed domestically and globally, with business activities in the gaming industry. This ETF invests in companies involved in hardware, software and services relating to the electronic gaming industry. Learn more about this fund by clicking here.
HERO ETF Portfolio Strategy and Activity
For the month, Nintendo Co Ltd. made the largest contribution to the Fund, followed by CD Projekt S.A. and Square Enix Holdings Co Ltd. The largest detractors to performance for the month were Electronic Arts Inc., followed by Bilibili Inc., and Netease Inc. By weight, the Fund’s largest geographic exposure was to the United States, followed by Japan and China.
For the latest information on investing in video games and industry updates on related investment products, sign up for our weekly newsletter here.
- D’Anastasio, C., “A Video Game Pile-Up Next Year Doesn’t Guarantee a Sales Boom,” Bloomberg, September 16, 2022; https://www.bloomberg.com/news/newsletters/2022-09-16/game-releases-from-zelda-to-hogwarts-next-year-may-not-lead-to-higher-sales.
- Smith, C., “Take-Two Stock Fell Hard After the Next Grand Theft Auto Was Leaked. Why It’s Already Recovered.,” Barron’s, September 9, 2022; https://www.barrons.com/articles/grand-theft-auto-vi-take-two-stock-51663615604?noredirect=y.
- D’Anastasio, C., “Roblox Jumps on Plan to Introduce Immersive Ads in Games,” BNN Bloomberg, September 9, 2022; https://www.bnnbloomberg.ca/roblox-jumps-on-plan-to-introduce-immersive-ads-in-games-1.1816895.
- Martewicz, M., “CD Projekt Beats Estimates as Cyberpunk-Tainted Year Wraps Up,” Bloomberg, April 14, 2022; https://www.bloomberg.com/news/articles/2022-04-14/cd-projekt-beats-estimates-as-cyberpunk-tainted-year-wraps-up.
- “PLAYSTUDIOS Acquires Mobile Casual Game Studio Brainium, Adding a Rich Suite of Popular Games to the Company’s Portfolio,” Yahoo! Finance, October 13, 2022; https://finance.yahoo.com/news/playstudios-acquires-mobile-casual-game-104500630.html.