To The Moon

Takeaways

1. Chinese game version authoration number restarted, Tencent, Netease are welcoming the new chance.

2. EA's Q4 earnings miss, new games delayed again, investors flew.

3. Blizzard's takeover makes Microsoft hard, authoration in process.

Tencent has new chance

$TENCENT(00700)$ LIGHTSPEED STUDIOS officially announced that the new game "Garena Undawn", which got the version number on January 17th, will be launched this month, and I am afraid it will become another explosive game that has brought considerable water to Tencent since "Peace Elite".

Previously, we also saw the trend of slowing down the game business through Tencent's deferred revenue, and the deferred revenue declined year on year in the first three quarters of 2022. Obviously, the version number supervision in 2022 has prevented new games from being approved, and the demand for Internet supervision and minor protection has also suppressed the game business.

Of course, the initiation degree of a game depends on the overall environment of the industry. At present, the good news for Tencent is$Activision Blizzard(ATVI)$ and$NetEase(NTES)$ are officially breaking up, it's the window period.

It is reported that Blizzard has refunded more than 1 million orders after ending the game service in mainland China

Blizzard's IP content is rich, and the window left behind is large enough. Previously, it was rumored that some second-line game companies might take over NetEase, but there was no news later. Even NetEase can't pick up the plates, and I'm afraid few companies can carry them down.

Of course, some loyal gamers may choose servers in other regions, but other players who quit can also bring new opportunities to other companies in the industry.$Bilibili Inc.(BILI)$$BILIBILI-W(09626)$$China Mobile Games and Entertainment Group(00302)$

EA plummeted

Electronic Arts (EA) plunged 9.26% in the trading on February 1. If it weren't for the doves' interpretation of the market after the Fed raised interest rates, it was estimated that the decline would have exceeded 10%. The main reason is that the Q4 financial report just released is less than expected.

The scheduled amount fell by 9% year-on-year; Revenue was 2.34 billion US dollars, a year-on-year increase of 5%, which was worse than the expected 2.44 billion US dollars; EPS was $2.8, which was worse than the expected $3.05.

The revenue of Apex series games, which are mainly in charge, is less than expected. At the same time, the mobile games of Apex and Battlefield (Star Wars theme) are "skipping tickets", which are postponed until the end of April, that is, running water will be generated at least one quarter later.

It is worth mentioning that Apex series mobile games are also developed by Tencent's Photon Studio, but the focus of Photon is not on this game. Tencent's overseas layout is still PUBG Mobile and Valorant, which can stably generate good running water for Tencent at present.

Because two heavyweight games (or mobile games) skipped tickets, the guidance for next quarter is definitely not good, and it is no wonder that investors sold off a lot. As for when will it recover? It definitely depends on when the company plans to launch new games and the market investment sentiment in the game industry at that time.

Blizzard Acquisition Struggling

The current development is that the antitrust bureaus of the United States, Britain and the European Union have all expressed concern, which may be the biggest regulatory threat to Microsoft in 20 years.

The US Federal Trade Commission filed a lawsuit last month to block the deal, and the UK Competition and Markets Authority will also provide provisional results of its investigation into the deal in the coming days. The EU's antitrust will issue a ruling on the deal before April 11.

The only optimistic thing is that Chinese regulators have provided positive feedback, which may be related to Blizzard's console games not accounting for a high proportion of the Chinese game market.

This shows that the potential of console games is still great.$Activision Blizzard(ATVI)$ $Microsoft(MSFT)$