Welcome to “Game On,” The Fly’s weekly recap of the stories powering up or beating down video game stocks. NEW RELEASES: The one major release this week is Nintendo’s (NTDOY) “Donkey Kong Country: Tropical Freeze” for the Switch console. The 2D platformer, which initially rolled out for Wii U consoles in 2014, releases May 4. CONSOLE MAKER EARNINGS: All three major game console manufacturers released quarterly or yearly results last week, with Microsoft (MSFT) reporting better than expected results for its third fiscal quarter. In particular, gaming revenue increased 18%, or 16% in constant currency, in the quarter, driven by Xbox software and services revenue growth of 24%, or 21% in constant currency, mainly from third party title strength. Meanwhile, Sony (SNE) reported a 17.8% year-over-year increase in its game and network services segment in fiscal 2017, driven by an increase in PlayStation 4 software sales, the impact of foreign exchange rates, and a boost in the number of subscribers for PlayStation Plus, its paid online membership service. In addition, Nintendo reported yearly increases in profit per share, net sales, operating profit, and net assets in fiscal 2017, noting that it sold 15.01M Switch units during the fiscal year. On the software side, the company said it sold 10.41M units of “Super Mario Odyssey,” 9.22M units of “Mario Kart 8 Deluxe,” and 6.02M units of “Splatoon 2.” NEW NINTENDO PRESIDENT: Along with its report, Nintendo announced that it named Shuntaro Furukawa to the titles of representative director and president of the company. Current president Tatsumi Kimishima, who assumed the position in 2015 following the death of Satoru Iwata, will step down in June. Pending approval by Nintendo’s shareholders, Furukawa will assume his new role on June 28. NINTENDO, CYGAMES PACT: In addition, Nintendo announced last week that it is partnering with Cygames over a new gaming application for smart devices. In summer 2018, Nintendo will release an action-RPG application called “Dragalia Lost,” which is designed by Cygames for smart devices. Nintendo has been co-developing and will jointly operate the game with Cygames. As part of the partnership, Nintendo is acquiring roughly 5% of Cygame’s issued stocks mainly through a third party allocation of its treasury stock.
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