(BFM Bourse) – The number of publishers or developers of video games listed on the stock exchange is significant, beyond the most obvious names, such as Nintendo. BFM Bourse cites several telling examples.
Video games remain a sector with modest weight on the stock market. According to data from companiesmarketcap.com, the approximately 233 listed companies in this industry represent approximately $4.295 billion in market capitalization, twice as much as automakers.
But by removing Microsoft ($3.1 trillion), whose video games represent only a tiny part of revenues (7%), or the Chinese digital behemoth Tencent, the figure drops to just $650 billion.
However, the sector remains rich in names well known to the general public and not just to experienced gamers. We previously listed the ten largest listed companies in the industry in a ranking. Microsoft, Tencent and Sony dominated the hierarchy.
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CD Projekt, the Polish company that wanted to remain independent
In this top 10 also included Nintendo, whose stock price still seems linked to the hypothetical release of a second generation of its Switch console, and Electronic Arts, known for its sports licenses, such as EA Sport FC (formerly Fifa ). The American group also held a day dedicated to investors in mid-September to present its long-term strategy and praised the benefits of AI on its business.
The distributor of the GTA series, Take Two, is also at the bottom of this ranking, with shares down 6% since the start of the year. The title suffered in particular from the fact that the release of GTA VI, highly anticipated by the market, is only scheduled for this fall.
But beyond the top 10, the rest of the ranking is worth a look. In Europe, the Parisian stock market obviously includes Ubisoft, which has suffered significantly in recent weeks on the stock market. The group issued a heavy warning on its results at the end of September due to the poor performance of “Star Wars Outlaws” and postponed the launch of its game “Assassin’s Creed Shadows” by three months. The action, however, recovered 33.5% on Friday, driven by speculation about a potential exit from the listing and a takeover by the Guillemot family alongside Tencent.
Apart from the Franco-Quebec group, CD Projekt, a Polish studio known for the games “The Witcher” and “Cyberpunk 2077”, is listed on the Warsaw Stock Exchange, with a market capitalization of just over 4 billion euros. In a sector that tends to consolidate, as illustrated by Microsoft’s acquisition of Activision Blizzard in 2023, the company’s small size may lead it to be seen as obvious prey. But its management has repeatedly rejected this idea of a takeover, as IGN.com points out.
Sega, it’s always stronger than you
But it is especially in Japan that many well-known groups are listed. Nintendo’s former great rival in the 90s Sega is thus present on the Tokyo Stock Exchange. More precisely, the company which created the Megadrive and the Saturn is now a subsidiary of the holding company “Sega Sammy Holdings”, the listed structure in question.
This company was born in 2004 following Sega’s merger with Sammy, a Japanese company specializing in “pachinkos”, machines that resemble a mix between pinball machines and slot machines and which are an integral part of Japanese culture. . The merger between the two groups led Sammy’s shareholders to hold more than 70% of the new group. Sega Sammy Holdings’ revenues today amount to 468 billion yen, or around 3 billion euros, for a market capitalization of just under 4 billion euros.
Another group resulting from a merger, Bandai Namco is much heavier, with a market capitalization of 13.3 billion euros and revenues of more than 1,000 billion yen, or 6 billion euros. This company was born in 2005 from the merger between Bandai, known for its derivative products (games, toys) from famous cartoons, and Namco, giant of arcade games, notably with Pac-Man, Ridge Racer and the Tekken series. The company recently released the blockbuster “Elden Ring.” Last year, Bandai Namco had the honor of appearing in “Heard on the Street”, an editorial section of the Wall Street Journal devoted to listed groups. The American business daily then praised the incredible strength of the group’s licenses, notably Gundam, giant robots famous around the world. And whose global sales of derivative products (especially toys) are close to one billion euros.
Capcom, between sequels and remakes
Eternally famous for its numerous franchises such as Street Fighter, Megaman and Resident Evil, Capcom has a market capitalization of around 8.5 billion euros, for a turnover of around 950 million euros. The company has benefited, more recently, from the success of its Monster Hunter series.
“In the 2010s, Capcom shifted its strategy from producing new games to selling remakes and expanding global sales of older titles through digital distribution. This is what enabled Capcom to record steady sales growth and high profits over the past decade,” Morningstar said. A bit like Nintendo, Capcom also earns revenue from the exploitation of its licenses in cinema, notably with the Resident Evil films (not very good by the way).
A little bigger than Capcom, with a capitalization of 11.5 billion euros, Konami remains a Japanese video game giant, with revenues of 2.3 billion euros. Known for its Metal Gear Solid and eFootball (formerly PES) series, Konami recently relaunched two flagship sagas, with remakes of the role-playing game Suikoden and the horror survival title Silent Hill. Beyond video games, the company is present in sport, notably with gyms…And pilates studios.
It’s also difficult to miss Square Enix, the company resulting from the merger in 2003 of the two role-playing game giants Squaresoft (Final Fantasy) and Enix (Dragon Quest). Its market capitalization remains quite modest (around 4.3 billion euros) while its revenues stand at around 2 billion euros.
In May, the group’s action fell 16% over one session after the company admitted to analysts that sales of two flagship games, “Final Fantasy VII Rebirth”, sequel to the remake of the legendary Final Fantasy VII and ” Foamstars”, a shooter, were disappointing. According to Bloomberg, the company recently revised its strategy to focus on a smaller number of releases, with fewer mobile games, while expanding its flagship titles to multiple consoles, not just Sony’s Playstation.
Finally, let us cite Koei Tecmo (again a merger between Koei and Tecmo in 2009), a company known in particular for its Dead or Alive series of fighting games, or the Ninja Gaiden and Dynasty Warriors franchises. The company recently released “Rise of the Ronin,” an action game set in 19th century Japan, on the Playstation 5. In its last published financial year, its revenues exceeded 500 million euros. Its market capitalization amounts to approximately 3.2 billion euros.
Note that Koei Tecmo, like Capcom and Nintendo, counts the Saudi Arabian sovereign wealth fund among its major shareholders. These increasingly significant investments by Riyadh in Japanese video game groups – notably in Nintendo, whose fund holds more than 8% of the capital – are part of the country’s diversification strategy, which wants to expand its economy to areas other than hydrocarbons.
Julien Marion – ©2024 BFM Bourse
