This year's epidemic has had a huge impact on many industries, but the game industry has benefited from misfortune under the quarantine policy, and people who cannot engage in outdoor activities have begun to turn to game platforms for social networking and entertainment, whether in terms of the number of players or the length of online time. During this period, it has increased significantly. Judging from the semi-annual reports released by overseas giants, the performance of various companies has exceeded expectations one after another. therefore, investors can look forward to the performance of domestic leading companies such as Tencent and NetEase, Inc.

First, Japan's double giants, the game business has grown substantially.

When it comes to games, Nintendo's Super Mario may be the first game experience for a wide range of players, from the earliest FC to today's Switch, this classic IP has been upgraded with generations of Nintendo consoles. Similarly, in the game console, the name of PlayStation is well known. Under the leadership of the previous CEO, Kazuo Hirai, Sony Group Corp completed the transformation to the game and image CMOS business, smoothly turning Sony Group Corp into profits and throwing off the hat of "about to go bankrupt".

According to the latest financial report, the game business of the two bosses achieved substantial growth in the first half of the year, taking into account such a large volume of business, such achievements, people look forward to the performance of the domestic leader.

1. Nintendo Switch is a big seller, with rapid growth

As of June 30, Nintendo's net sales in the first quarter of fiscal 2021 reached 358.1 billion yen, an increase of more than 100% year-on-year, while operating profit recorded 144.7 billion yen, an increase of more than 400%, and net profit reached 106.4 billion yen, an increase of 541.3%.

For Switch, hardware sold 5.68 million units, up 166.6% from the same period last year, while software sold 50.4 million sets, up 123% from the same period last year. A total of 406 million sets of Switch games were sold throughout the financial quarter, and the "Animal Forest Friends", which was frequently searched in the first half of the year, ranked first on the sales list with 10.63 million sets.

With such a strong trend, the boss is going to make a lot of money this fiscal year, but the company has given a relatively conservative full-year forecast that Nintendo's Switch sales are likely to fall by nearly 10% this fiscal year compared with fiscal 2020, while net sales and net profit will also decline.

In theory, sales should increase during the summer vacation and the consumer season at the end of the year, so why is the company so conservative? The reason may lie in another Japanese giant.

2. Sony Group Corp's game business has become the driving force of performance growth, and PS5 at the end of the year is even more anticipated.

In Japanese history, in the famous "change of Benneng Temple", Ming Zhi Guangxiu shouted that "the enemy is in Beneng Temple", indicating that the enemy is inside us. Yes, for Nintendo Switch, the pressure comes from Sony Group Corp.

According to Sony Group Corp's latest financial report, the company's revenue for the quarter was 1.96 trillion yen, up 2.2 per cent from a year earlier. However, affected by the global epidemic, Sony Group Corp's electronics, semiconductor, music and other businesses have declined, and the overall operating profit has declined. While the game business is due to the strong growth of game software and PS Plus registered members, Sony Group Corp's game and network services department's revenue reached 606.1 billion yen this quarter, a year-on-year growth rate of 32%, and the department's operating profit reached 124 billion yen, accounting for 54% of the company's total operating profit, which has become the driving force driving the company's performance growth.

With the help of the Last Survivor 2 and the Soul of Falklands, 1.9 million PS4 consoles and 91 million games were sold this quarter, while the number of PS Plus subscribers reached 44.9 million. According to market speculation, the new console PS5 will be released in November, and thanks to the strong game lineup, the PS5 console is expected to beat Microsoft Corp's Xbox again, further boosting Sony Group Corp's group business.

Second, American companies are growing rapidly, turning cars and guns into cash cows.

When it comes to Microsoft Corp, the company also relies on Xbox Series X and Sony Group Corp to compete in the game field, and in the latest company financial report, Microsoft Corp's game business also increased by 64%. Xbox game content and service revenue increased by 65% compared with the same period last year. With such a growth rate, it is not a company that specializes in games.

On the other side of the ocean, European and American players pay more attention to the hard core feeling brought by the game mechanism and the picture, so "car Gun Ball" has many fans, and this kind of game has also become the cash cow of American companies.

1. Car and gun ball model EA, the performance of FIFA has soared.

EA can be said to be a model of "car gun ball", "Need for Speed", "Battlefield", "FIFA" and other famous IP, although some works are called "New year products" by players, but it does not prevent these players from krypton gold every year. According to the company's latest financial report, EA's Net Bookings reached $1.39 billion this quarter, an increase of 78% over the same period last year. In particular, games on the PC console performed well, up 98% from the same period last year, while the PC side also grew rapidly, with a growth rate of 74%. Sales of new year goods FIFA grew by more than 100% year-on-year this quarter, and Madden rugby more than 140%.

For the rapid growth of the host class and the recovery of the PC side, NetEase, Inc boss Ding Lei once said that because the playing experience of the host and PC games is incomparable to mobile games, with the release of the new host, another release cycle of masterpieces is coming.

2. GTA is still hot, and Take-two is growing significantly.

When it comes to masterpieces, GTA, the classic IP, has been a hit for many years, and as the best-selling game works, various versions of GTA continue to generate revenue for Take-two. The company's net income rose 54 per cent year-on-year to $831 million, while net income rose 91 per cent year-on-year to $88.5 million, benefiting from hot sales of GTA, wilderness darts and NBA2K, WWE wrestling.

Unfortunately, there is no news about GTA6 in the company's financial report, but it is undeniable that creating all kinds of masterpieces of Take-two is bound to bring more shocking works for players after the release of the new mainframe.

3. The call of duty becomes the revenue driver, Activision Blizzard does not have high-quality products, it still makes money.

And before that boutique professional household, Activision Blizzard, the quality of its work has declined in the past two years, especially in Blizzard, where the work is called "fried cold rice" by players, but Activision's performance is excellent and the company's overall performance is still strong. The company's net income for the quarter was $1.93 billion, up 37.86% from a year earlier. Among them, Activision grew the most, with revenue up 270% year-on-year, thanks to the strong performance of the new version of call of Duty; Blizzard still relied on World of Warcraft, with revenue up 20% year-on-year; and mobile game division King benefited from user Krypton gold and advertising revenue, with revenue up 11%.

As a representative of European and American game manufacturers, Activision Blizzard's strong performance shows that the global game market is hot, and the epidemic has not hindered the enthusiasm of players at all. Through the results of the semi-annual reports of overseas game companies, we can look forward to the financial performance of our domestic Tencent and NetEase, Inc.

Conclusion

In works such as "Fortnite" this year, players have not only worked together to crack down on monsters and strategic checkpoints, but in this world, everyone can watch concerts and buy around stars, and the connotation of the game world has been expanded. there will be more games and cash modes in the future.

In the second half of the year, with the advent of new consoles, companies will certainly make great efforts to attract players with their own works, while with the introduction of technologies such as 5G and VR, the way of playing cloud games is becoming clearer and clearer, and the future development space of the game industry is broader.