Earnings Calendar July & Aug 2016: Gaming, Media & Tech Companies

July 19, 2016August 4, 2016 DomsPlaying1 Comment

Every quarter, “earnings season” comes around and gets us financial nerds excited. This is the recurring time period when public companies around the globe announce results for their latest financial period, whether it be quarterly, semi-annually or annually. The releases for this latest quarter usually happen between July and August for the months prior to the end of June i.e. half-way through the year.

Different companies have different fiscal periods, of course, but this is the general timetable and it makes for an interesting time since it’s the best way to get a handle on how well a company is performing and also gather reactions from investors, analysts and industry commentators.

In “celebration” of our latest earnings period, I’ve compiled a list of select companies in the gaming, media and technology industries and the dates on which each will reveal their latest results. See this full list as follows.

This list has been edited as of 8/4/2016, with updates to some that were “estimated” previously. These are NVIDIA, NetEase, Mad Catz and GameStop.

Still unsure on Square Enix and NCSoft, will update accordingly!

This is also available via the following Google Docs link, in case you’d like to visit the individual links I’ve compiled:

Working Casual Earnings Calendar July & Aug 2016: Gaming, Media & Tech Companies

This is sorted based on timing, and I’ve included a link to each firm’s investor relations site which is where you can go of course to read the full announcements. Public companies will also have an earnings conference call where executives and key personnel announce the results formally and take questions from analysts covering their stock.

This is actually my favorite part of the earnings ritual, in particular the analyst Q&A sessions, as the calls offer even much more insight into how a company is doing. Sometimes executives will provide facts or statements outside of what is in the press release or filings, and it helps provide further context for results and also it’s revealing on who is running the company. And there are even times when an executive can’t answer one of the questions, or dances around the real answer, and it’s fun to see the back-and-forth between these parties.

A couple highlights are today both Microsoft Corporation and Ubisoft Entertainment SA will reveal their latest results, then next week the world’s largest company Apple Inc will be reporting.

Nintendo Co., Ltd. will also report next week, after the exceptional initial success of its Pokemon Go venture with The Pokemon Company and Niantic Labs. I wouldn’t expect to learn how much this new mobile game sensation is contributing to revenue just yet, as it’s only been out for a week and a half (hard to believe, right!). Still, Nintendo will likely address the game in some capacity.

Technology manufacturer Samsung Electronics Co Ltd is late next week, as is huge retailer Amazon.com Inc. These companies, in addition to Apple, are often a sort of barometer for how consumers are acting on a global scale.

Lastly, in August, we’ll hear from Tencent Holdings Ltd in its first financial release after acquiring Finnish developer Supercell for $8.6 billion. The company is now the world’s largest public gaming firm by revenue, and serves as a benchmark to seeing how well the international mobile games market is faring in particular.

Want to hear more about the releases as they happen? I often try to provide perspective and figures/numbers on Twitter when I’m not writing here, so visit me and shoot me a tweet! I should have a write-up on a couple of these companies soon, in particular both Activision Blizzard, Inc. and Nintendo. Until then, did I miss any companies you are following? Please let me know and I’ll add them accordingly.

Sources: Company Investor Relations Websites, Wall Street Journal, Newzoo.

-Dom

Which Indie Video Game Has More Sales Potential: Mighty No. 9 or No Man’s Sky?

June 20, 2016 DomsPlaying2 Comments

There are a variety of factors that drive how well a product sells: cost, marketing, timing of release, inventories and consumer sentiment among them. When it comes to video games, publishers often target the demand side of the equation by either appealing to gamer nostalgia or innovating on a familiar concept in order to draw attention to their title within the vast landscape of games released today.

The creators of two upcoming indie games are using these tactics: Mighty No. 9, developed by Comcept/Inti Creates with publishing by Deep Silver; and No Man’s Sky, which is made and published by Hello Games. The former is a nostalgia play, with its Mega Man-influenced action-platforming gameplay, while the latter is a monumental effort in the space exploration/survival and flight simulation category, boasting an infinite universe for players to explore. Mighty No. 9 is releasing on a variety of platforms, while No Man’s Sky is a Sony PlayStation 4 “timed” console exclusive that will also be available on PC.

Both games have had an interesting history to date, which will certainly impact sales potential. Mighty No. 9 is the brainchild of former Mega Man producer Keiji Inafune, and was announced way back in 2013 with a Kickstarter crowd-funding campaign that has since raised around $4 million on the strength of 67K backers. However, the game has been delayed multiple times, annoying backers and potential consumers, and has been ridiculed for generic gameplay reveals and an especially corny marketing trailer (see below). Review consensus also seems to be negative overall from early impressions.

No Man’s Sky was revealed at E3 2014 to broad fanfare, though skeptics point out the game’s colossal ambition could ironically also be its downfall plus Hello Games has been quite secretive on what it exactly is that you do in the game other than explore its vast universe. The game has developed a fervent online following, and was originally scheduled for a release this month but has since been pushed back to August. Upon news of this delay, creator Sean Murray received death threats from crazed individuals. As much as this is pure insanity, it also displays the thirst for a game that perfects the space exploration genre.

So, what kind of sales potential do indie campaigns like this have? Mighty No. 9 has a very attractive price of $30, though the negativity swirling around its Kickstarter campaign and several delays indicates to me that the hype level is dwindling at the worst possible time with its release this week. Though the Mega Man series that inspired the game has sold approximately 31 million units to date, the highest-selling title in the series is Mega Man 2 at around 1.51 million copies.

I can’t see Mighty No. 9 being anywhere near as successful, even considering the 67K or so backers. I can see around 450-500K copies worldwide lifetime at the most.

Now, No Man’s Sky is a bit of a different story. It has established a following that is already starved for both information and a great game in the genre itself, so I believe it can withstand its recent delay. And even though it is only releasing on PS4 and PC, and it’s a full-priced $60 game, I still see lots of upside with the current install base of PS4 being around 40 million and the game itself appealing to a PC audience. Another promising point is that we’ve seen solid sales for space titles recently, as names like Kerbal Space Program by Squad and Elite: Dangerous by Frontier Developments (FDEV) have sold over 1 million and 500K units, respectively. Even an older title like EVE Online by CCP Games is still estimated to have around 340K active players.

With the hype surrounding No Man’s Sky, success of (somewhat) comparables and its release timing before the pre-holiday rush, I estimate it could sell upwards of 1.5-1.75 million around the world with most of those coming this year.

Do you agree that Mighty No. 9 will sell less than No Man’s Sky? Or do you think the uncertainty around delays of both titles will mean that neither will sell particularly well?

Note that Mighty No. 9 releases on Tuesday 6/21, while No Man’s Sky is currently slated to come out on Tuesday, 8/9.

Sources: Deep Silver, Hello Games, No-Mans-Sky.com, Capcom, Frontier Developments, Kickstarter, YouTube.

-Dom

Bottom Line: How Healthy is Nintendo’s Financial Position Ahead of Earnings & NX?

April 26, 2016April 26, 2016 DomsPlaying16 Comments

Ahead of Nintendo Co., Ltd (7974) earnings release and investor conference this week, let’s take a look at the gaming firm’s financials: how healthy is it really right now before the pending formal reveal of its latest hardware piece dubbed “NX” and its move into mobile?

If internet chatter and market sentiment are to be believed, Nintendo is struggling badly. Its stock is down 30% over the past 6 months, indicating investors are nervous. But is this warranted given its current situation and future prospects?

Perhaps, but I think it’s overblown. Compared to competitors Sony Corp (6758) and Microsoft Corporation (MSFT), Nintendo has smaller market capitalization and sales/income figures. But I’d argue it’s also a much more focused company that’s pure-play gaming, whereas the other two are broader corporations. When looking at strictly gaming-related figures, Nintendo’s sales are in fact lower than both though operating margin is comparable to Sony’s (Microsoft is better than both here) which indicates it doesn’t sell as well but it is actually more efficient from a profitability standpoint.

Edit: Caveats to above table is that Microsoft includes the following in its Computer & Gaming Hardware segment: Xbox gaming and entertainment consoles and accessories, second-party and third-party video game royalties, and Xbox Live subscriptions (“Xbox Platform”); Surface devices and accessories (“Surface”); and Microsoft PC accessories.

Additionally, it does not directly report Operating Income at its segment level but rather Gross Margin, so I have taken this figure out of the table for now. I would like to get a better estimation of Operating Income before updating again.

The main knock on Nintendo lately is that the Wii U console, released in late 2012, has been a failure. Below shows Wii U lifetime sales each fiscal year compared to both Wii and Nintendo 3DS, aligned for their launch timings. It’s true that sales of the console have been lackluster compared to recent consoles and Nintendo’s handhelds, but the success of the Nintendo 3DS in particular has supporting sales and earnings since its release in 2011.

Still, you’ll notice below that from a monetary standpoint, Nintendo is actually not trending downward. In fact, it turned an operating profit in 2015 for the first time since 2011, just after peak success of the Wii (released in 2007). Its net income was also positive in 2015 compared to losses in 2014 and 2012. Sure overall sales have declined a bit over the past five years, but last year’s figure of ¥549 trillion (~$5 billion) is only around 15% lower than 2012. Additionally, taking into account its liabilities, the firm has around just under ¥100 trillion ($1 billion) of cash available which it can use to invest in future endeavors.

And Nintendo is also a software company, which is a key component of its overall business. Software sales have softened a bit over the past five years, but I expect a bump once NX is released in time for 2017 financials.

Which brings me to the key going forward, as most gamers understand: Nintendo’s new NX hardware has to be a hit, its foray into mobile needs to be monetized and it needs great games in order to achieve a financial rebound. It has to differentiate NX from Wii U, similar to how Wii separated itself from its predecessor in GameCube. The way Wii had motion controls, NX needs to stand out.

Common speculation has it that the NX is a cross-over between a console and handheld, and that it will bridge the gap between home and mobile gaming plus offer an online infrastructure that is superior to the Wii U and Nintendo 3DS. But Nintendo has yet to commit to any sort of messaging on the new console yet. The firm did release its first mobile game, Miitomo, this month however has yet to show any sort of monetization. It’s more of a foundation upon which to build future mobile games.

All in all, Nintendo’s current financial situation is somewhat concerning compared to recent years and its big competitors, but it’s not as dire as its stock performance or internet message boards will have you believe based on profit rebounding and cash on hand to invest in its future. Do you agree?

Sources: Nintendo Co., Ltd, Sony Corp, Microsoft Corporation, Google Finance.

Note that all figures above are based on today’s exchange rate between JPY and USD.

-Dom

Bottom Line: Disney Record Results But Market Outlook Negative?

February 11, 2016February 11, 2016 DomsPlaying

Walt Disney Co. (DIS)

Bottom Line: Star Wars brand drove a quarter with record income for DIS, but contraction in Media Networks is a concern for analysts and investors going forward. It should be an interesting year for DIS as pipeline includes Finding Dory, Captain America: Civil War, more Disney Infinity but the main areas to watch are Star Wars merchandise and the future of ESPN.

Questions: What other areas or products can drive growth for DIS this year? Are you positive overall on ESPN? Can Star Wars alone, between licensing and merchandise, abate concern with Media Networks at least this year?

Dissecting a huge media conglomerate’s financials is a monumental task, so I won’t necessarily be posting every single stat or figure but want to address the above question while overviewing the company’s current business.

DIS reported 2016Q1 earnings this week, with record net income however the market sentiment is still negative as indicated by the firm’s stock movements after earnings release. So what’s behind this divergence? The firm’s main profit drivers are Media Networks (cable channels, ABC & ESPN etc) and Studio Entertainment (movies, including Star Wars and Marvel titles) with the latter almost doubling income since last year due to Star Wars: The Force Awakens release.

The key here is that Media Networks income contracted since last year despite sales being up, as costs are also increasing on a relative basis. Driving this is partly timing, as the College Football Playoffs occurred during this quarter, but also rate increases for sports programming and production costs going up. A general concern is the sentiment around ESPN in particular, where programming costs are up and cable subscribers are “cutting the cord” adversely impacting advertising potential. To combat this, DIS is trying to expand ESPN mobile offerings, as WatchESPN now displays all live shows and events in order to have more eyeballs on advertising. I’ve even heard rumblings that DIS should consider an approach similar to HBO Now, offering ESPN content separate from a cable contract for a subscription fee. I’d say this is a last resort, at present.

As for gaming, the Consumer Products & Interactive Media is actually quite healthy but this of course seasonal and this quarter included holiday 2015. Revenue and income were boosted by licensing from Star Wars i.e. Star Wars: Battlefront while Disney Infinity results were lower (sales volume down, inventory up). Even compared to last year, when Frozen merch was all the rave especially with kids accumulating annual sales of $3 billion, Star Wars gear has just begun to reap benefits and Nielsen expects it to account for $5 billion in revenue across this year.

Last note is that DIS results are being propped up by the steady Parks and Resorts segment, up more than 20% since last year driven by Americas region. I see this as continuing to be a key component of the firm’s diversified approach, especially as the cable landscape changes and products/interactive media remains seasonal and dependent on the strength of content and titles.

Sources: Walt Disney Co. Form 1oQ February 9, 2016; Walt Disney Co. Q1 FY2016 Earnings; Nielsen

-Dom

Introducing Working Casual: Gaming, Media & Tech Blog

February 9, 2016 DomsPlaying

Hi all! I know it’s looking basic at this point, but bear with me while I settle in to my new blog. Welcome to Working Casual: Gaming, Media & Tech Blog! Written by yours truly, DomsPlaying (just Dom is fine).

As noted in the sidebar, this is a place where I’d like to interact with the community to discuss video games, the gaming industry and related businesses including media and technology in a way that we all can understand.

My background covers both these various industries and research, business and analysis as I have degrees in both Economics and Journalism & Media Studies, and currently work in the financial data field with hobbies of gaming, following digital media and keeping up on the latest technology. I had a brief foray into blogging earlier in my career, and have been meaning to revisit this interest as the medium evolves and digital media industry expands overall. Not to mention I need to use those writing skills! On a personal level, I’m based in the Tri-State and come from a family-oriented, Italian-American background that loves good food and fun times together.

So ultimately I would like to initiate discussions on topics related to all of these, and provide perspective while also chatting about the games I’m playing, media stories I’m following and technology I’m using. I know that’s ambitious for the internet, but let’s roll with it for now.

I look forward to expanding on this first post, and meeting like-minded folks that have similar interests. Thanks for reading, and feel free to reach out via social media links to the right or email as I’m always open for a good chat or debate.

-Dom

Working Casual

Gaming, Media & Tech Coverage

Tag: Working Casual

Earnings Calendar July & Aug 2016: Gaming, Media & Tech Companies

Which Indie Video Game Has More Sales Potential: Mighty No. 9 or No Man’s Sky?

Bottom Line: How Healthy is Nintendo’s Financial Position Ahead of Earnings & NX?

Bottom Line: Disney Record Results But Market Outlook Negative?

Introducing Working Casual: Gaming, Media & Tech Blog