Stifel analyst Drew Crum said he estimates U.S. videogame sales to decline 6% to $57 billion in 2022, benchmarked against data from NPD Group. That contrasts with videogame data-research firm Newzoo’s estimate of 2% growth, Crum said.
“We view videogames as an inexpensive form of entertainment that should ‘hold up’ in a period of macro weakness, and companies that develop and launch compelling content have a better chance of engaging with and monetizing across their respective player communities,” Crum said. That reflects “a stronger slate and easier comps from Activision Blizzard Inc., and a stronger slate and full year of contributions from Zynga for Take-Two Interactive Inc.,” said Crum, who considers Take-Two TTWO, -2.70% one of his top picks because 24 immersive core titles are planned for release between 2023 and 2025.
The Stifel analyst thinks Electronic Arts Inc. EA, -0.06% should also hold up well because of the composition of its portfolio, “with sports representing more than 60% of the company’s net bookings, a genre that’s perennial in nature and hence may offer greater consistency in what can be a ‘hit-driven biz.'” Crum has a buy rating on EA, and said his buy rating on Activision ATVI, +2.27% assumes its acquisition by Microsoft Corp. MSFT, +0.85% is a done deal.
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