Game On: Analysts boost EA price targets after earnings beat
Welcome to "Game On," The Fly's weekly recap of the stories powering up or beating down video game stocks. NEW RELEASES: This week's big release is an enhanced port of "Hyrule Warriors," a hack-and-slash action game based on the "Legend of Zelda" franchise, for the Nintendo Switch (NTDOY). The game, which was also published by Nintendo, launches on the Switch worldwide on May 18. EA EARNINGS: Last week, Electronic Arts (EA) reported better than expected results for the fourth quarter and provided an outlook for the first quarter and fiscal 2019. In addition, the company announced a new $2.4B stock repurchase program. Following the report, Piper Jaffray analyst Michael Olson backed an Overweight rating on the stock and raised his price target for the shares to $148 from $145, saying that EA's initial earnings guidance has understated final results by an average of 11% over the past three years. As such, Olson believes the game maker's initial FY19 guidance is likely conservative. In addition, analysts from Wedbush, Oppenheimer, and MKM Partners all raised their price targets on EA's stock following the quarterly report. HANGAR 13 EXPANSION: Before the market open, 2K and Hangar 13 announced the expansion of Hangar 13 in Brighton, U.K. The new office will be headed by U.K. game development veteran Nick Baynes, and will collaborate with the teams in Novato, California and the Czech Republic across all aspects of development on all future Hangar 13 projects. Hangar 13, a division of Take-Two's (TTWO) 2K Games, launched its debut title "Mafia III" in late 2016 to mixed reviews. CONSOLE WARRANTY UPDATES: After the FTC warned six major companies, including Microsoft (MSFT), Nintendo, and Sony (SNE), that some of their product warranties may be in violation of federal law, the console makers each responded by updating their warranty terms. Last Wednesday, Sony Interactive announced that it updated the terms of its Limited Warranties for PlayStation 4, PlayStation VR, PlayStation 3, and PlayStation Vita systems sold in the United States and Canada. The same day, Kotaku reported that Nintendo made changes to the warranty language on its site, now including a passage saying that the warranty only doesn't apply to damage caused by non-Nintendo products. Last Friday, Microsoft told GamesIndustry.biz that it had updated its warranties, saying they wanted to "clarify that having your device repaired by a third party, opening your console, or breaking the seal will not void the warranty."