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Summary
- GameStop stock zoomed 44.12 per cent following the announcement of its multi-year deal with Microsoft.
- Microsoft will launch its Xbox Series X in November and is expected to face stiff competition from Sony’s PlayStation 5.
- Canada-based Enthusiast Gaming, an upcoming gaming platform, will host its ‘Rising Stars’ reality competition between October 13 and November 5.
As the Covid-19 pandemic forces us to stay indoors, consumption of content on digital platforms has soared. Not just over-the-top (OTT) platforms, but e-sports and e-gaming segments are also witnessing a rush of users and hence, jump in revenues. As a result, gaming businesses are pulling out all the stops to win more consumers and expand their user base. Tech giant Microsoft’s Xbox SeriesX and Sony’s PS5 are already open for pre-order bookings.
Microsoft recently entered a multiyear partnership with American retail gaming firm GameStop, sending the markets in a tizzy.
Meanwhile, Canadian e-gaming company Enthusiast Gaming Holdings Inc has announced that it will be hosting its ‘Rising Stars’ reality competition from 13th October to gain more subscribers on its digital platforms.
A Strategic Deal: Microsoft Corp (NASDAQ:MSFT) & GameStop Corp (NYSE:GME)
MSFT Stock Price: US$ 213
GME Stock Price: US$ 13.93
Tech behemoth Microsoft Corp, which primarily develops software products and services, also manufactures video game consoles and digital music entertainment devices. GameStop Corp, on the other hand, is a videogame retailer, selling new and used gaming hardware, software, and accessories. GameStop distributes its products worldwide.
The two companies signed a "multiyear strategic partnership" that will enable Microsoft's cloud tech to be the backbone of GameStop's business operations. The deal also includes technology and apps that store associates use, including Microsoft 365 services and Surface devices. GameStop stores will offer Xbox complete access to its services. This strategic deal will aid the sales of Microsoft’s upcoming Xbox SeriesX via GameStop platforms.
GameStop stock on Thursday zoomed 44.12 per cent riding on the back of this deal.
According to a joint press release, GameStop will now run on Dynamics 365 to power its "back-end and in-store solutions."
This partnership will enable store associates the ability to reach universal-channel inputs about users preferences and purchasing history, real time data on product availability, customers, pricing, and promotions in order to provide a differentiated and customized in-store user experience.
The Xbox console sales surged 64 per cent year-on-year to US$1.3 billion in its second quarter 2020, reported Microsoft in its gaming revenue segment.
Microsoft is set to release its Xbox Series X in mid-November – its first update to the gaming console since 2013.
The company also acquired Bethesda Softworks' parent company - ZeniMax Media at US$7.5 billion. ZeniMax owns American video game publisher Bethesda Softworks – which is the creator of cult classics such as The Elder Scrolls, DOOM, Fallout, Wolfenstein, Starfield, Quake and Dishonored. Bethesda’s iconic and best-selling games will be added to the Xbox Game Pass subscription service. This is the second biggest deal in value next to Tencent’s US$ 8.6 billion acquisition of Supercell, which is expected to have a large impact on Sony’s PS5 as well.
Read: 5 Industries That Boomed During The COVID Pandemic
Sony Corp (NYSE:SNE)
SNE Stock Price: US$ 74.28
PlayStation 5, developed by Japanese manufacturer Sony Corporation, will be available on November 12 and it will cost US$ 500. As per the company’s first quarter fiscal year 2021 ended on 30 June 2020, sales are expected to surge year-on-year due to an increase in sales of game software and hardware segments, and the upcoming launch of PS5. Sales of game software that is downloaded from the network, as well as PlayStation® Plus and PlayStation®, is also likely to surge, added the multi-national company in an official statement.
The company’s revenue earned from Sony’s game and network services amounted to US$ 20.84 billion in the last fiscal year, making it Sony’s largest business division.
The company’s other major operations include Music and Pictures services, which generated US$ 7.82 billion and US$ 9.31 billion, respectively in the last fiscal year. Sony’s revenue reached around US$ 76 billion in 2019, that helps company to make it to the top 100 largest companies in the world.
Enthusiast Gaming Holdings Inc (TSX:EGLX)
EGLX Stock Price: C$1.6
Enthusiast Gaming Holdings Inc is a Vancouver-based e-gaming company with an online network of over 80 owned and affiliated e-gaming websites and a network of 900 YouTube channels 150 million subscriber base.
It also holds and operates Canada's video-gaming exhibition, it is called Enthusiast Gaming Live Expo "EGLX". It also has operations in content, advertising, and events management segment.
To encourage more e-gamers, Enthusiast Gaming will host a Rising Stars reality competition, that aims to find the next gaming hero. The winner will receive a US$ 100,000 sponsorship with Luminosity Gaming and will be added to nominated to its influencers list.
Enthusiast Gaming announced strong second quarter for the current fiscal year with the increase in direct sales and subscriptions. The company’s current market cap is C$ 165.65 million. On August 6, 2020, the company acquired Omnia Media at C$ 15 million, making the largest gaming media, e-sports, and entertainment digital platform in North America.
The company’s stock is down 20.55 percent year-to-date (YTD). As per TSX’s key data, the company’s price-to-book ratio (P/B ratio) is 1.481.
