Xbox revenue jumps 13% in Q1 while multiple Sony studios lay off staff
“Game On” is The Fly’s weekly recap of the stories powering up or beating down video game stocks.
NEW RELEASES:
Among this week’s notable releases is Nintendo’s (NTDOY) party game “WarioWare: Move It,” which releases November 3 exclusively for the Switch. Also out is Square Enix’s (SQNXF) role-playing game “Star Ocean: The Second Story R,” which launches for Switch, PlayStation 4 (SONY), PS5, and PC on November 2.
MICROSOFT RESULTS:
Along with its quarterly report last week, Microsoft (MSFT) reported that Xbox content and services revenue increased 13% in its first fiscal quarter, as compared to its overall revenue, which increased 13% year-over-year. Looking ahead, the company said it expects Q2 Gaming revenue growth in the mid-to-high 40% range with an expected impact from the closing of the Activision Blizzard (ATVI) acquisition.
Just two days after the quarterly release, The Verge’s Tom Warren reported that Microsoft was reshuffling its Xbox gaming and marketing management roughly two weeks after closing the Activision Blizzard deal, with the company promoting Matt Booty to president of game content and studios, including the new responsibility of Bethesda parent ZeniMax, and Sarah Bond to Xbox president, leading all Xbox platform and hardware efforts. “ZeniMax will continue to operate as a limited integration entity led by Jamie Leder, President and CEO, reporting to Matt,” Microsoft Gaming CEO Phil Spencer said in an internal memo obtained by The Verge.
UBISOFT RESULTS:
Last week, Ubisoft (UBSFY) reported a 36.6% year-over-year increase in Q2 net bookings, with the company saying the results were driven by much stronger than expected revenues from back-catalog thanks to both its underlying overperformance and monetization through partnerships. It also reflects a record launch for “The Crew Motorfest” and higher “Assassin’s Creed Mirage” pre-shipments, the game maker added.
Yves Guillemot, Co-Founder and Chief Executive Officer, said “Ubisoft delivered an excellent second quarter, well above our expectations. Activity was mostly driven by the performance of our back-catalog, thanks in particular to the remarkable growth of Rainbow Six Siege, in an overall competitive environment for first-person shooter games. I want to pay tribute to the exceptional level of commitment from our teams, who have done amazing work on this game to deliver top quality content across platforms. The signing of new partnerships also contributed to the overall quarter performance, confirming once again that Ubisoft is one of the most sought-after partners in the industry, with highly recognized brands and assets.”
Looking ahead, Ubisoft reiterated its outlook for 2023-2024, noting that it has decided to launch an unspecified “large game” in FY24-FY25. “The overperformance in Q2 and the current positive momentum of Ubisoft’s brands build confidence for the rest of the year,” the company added.
Click here to check out recent Media Buzz Sentiment on Ubisoft as measured by TipRanks.
SONY LAYOFFS:
Last Tuesday, Sony subsidiary Media Molecule, creator of games such as “Dreams” and “LittleBigPlanet,” said it is laying off staff amid “significant strategic changes.” “We have had to make the difficult decision to begin the consultation process for team members within certain departments of the studio,” the company said. “This is a tough moment for the individuals impacted and the studio overall. Every single role that has been put at risk is delivered by someone who has contributed something special to Media Molecule. We will make sure those impacted receive the best support we can provide during this process.”
Meanwhile, Bloomberg’s Jason Schreier reported on Monday that Sony’s Bungie unit, which develops the “Destiny” franchise, laid off an undisclosed number of workers. In an email to staff, Bungie CEO Pete Parsons said the employees would be “hearing some news today” and that there would be a team meeting later to “discuss today’s events,” Schreier noted.
OTHER STORIES TO WATCH:
- U.S. video game content spending is up 2% year-to-date, says Circana [read more]
- Nintendo said “Super Mario Bros. Wonder” is the fastest-selling “Super Mario” title ever in Europe [read more]
- Microsoft will block the use of unauthorized third-party Xbox accessories, Windows Central reports [read more]
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Originally Posted October 31, 2023 – What You Missed This Week in Video Games
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