Earnings reports from Sony Corp (SNE - Analyst Report), Microsoft Corp (MSFT - Analyst Report) and Electronic Arts (EA - Analyst Report) dominated headlines this week. Apart from earnings, Sony was in the news with its announcement of consolidation of all of its PlayStation hardware, software and network operations under one roof — Sony Interactive Entertainment.

Among other smaller developments, EA pulled out of E3 to launch a separate event while Take Two Interactive Software (TTWO - Snapshot Report) signed a deal with World Wrestling Entertainment (WWE - Analyst Report) to produce more WWE themed titles. Video game retailer GameStop Inc (GME - Analyst Report) collaborated with game studio Insomniac to venture into the game publishing arena.

Top Stories this Past Week

1. Earnings:

Sony: Sony’s third-quarter fiscal 2015 GAAP earnings per share of ¥93.33 (78 cents), surged 21.3% from ¥76.96 in the prior-year quarter. However, net sales were  relatively flat at ¥2,238.7 billion ($18.7 billion). The Playstation business has emerged as a savior for Sony as most of its other divisions are facing a tough time. Sales and operating revenues of the Game & Network Services segment increased 10.5% year over year to ¥587.1 billion ($4,892 million) mainly on strong PS4 software and hardware unit sales. Sony has sold over 35 million PlayStation 4 units since its launch in Nov 2013.

Electronic Arts: EA reported third quarter fiscal 2016 adjusted earnings of $1.73, which easily surpassed the Zacks Consensus Estimate of $1.70. Moreover, non GAAP revenues of $1,803 million also exceeded the Zacks Estimate of $1,801 million. Analysts observe despite Star Wars Battlefront selling over 13 million copies ahead of Mar 2016, as projected, the company provided a outlook that was below expectations, thus spooking investors. The title’s physical copies sold more than digital copies, contrary to expectations, proving to be a drag on the video game publisher’s margins. Shares plunged over 8% in the aftermarket.

Microsoft Corp: Though gaming is a very small part of the company’s business, Xbox is an important aspect of the overall video game industry. As per Microsoft second quarter fiscal 2016 report, gaming revenues grew 9% constant currency. Xbox Live monthly active users grew 30% to 48 million. Video game revenues grew 57% driven by Halo and Minecraft with softness in Xbox 360 continuing to impact hardware growth.

2. In other news, Sony integrated its Tokyo-based hardware and games unit, Sony Computer Entertainment Inc. (SCE) and U.S based Sony Network Entertainment Interactive (SNEI) LLC, which dealt with the PlayStation Network, into a new company, Sony Interactive Entertainment LLC (SIE). Headquartered in San Mateo, CA, SIE will combine all of Sony’s PlayStation businesses under one roof.The cohesive corporate structure and relocation of headquarters reflects a crucial shift in the Japanese-Western gaming relationship.

3. As per media reports, EA, one of the leading video game publishers, has chosen to pull out of E3 Expo this year. In fact, it plans to showcase its upcoming titles in a standalone event at both Los Angeles and London during the E3 Expo. The E3 platform is used by several video game publishers to showcase their latest offerings. As per a Fortune report, EA is trying to directly market its games to fans instead of using the media, as the expo is not open to public.

4. Take Two’s subsidiary 2K signed a new multiyear deal with WWE giving it the “worldwide rights to develop and publish WWE video game properties across all major platforms and distribution channels.”

5. In a bid to expand its business, GameStop has ventured into the game publishing arena. It has collaborated with Insomniac Games to launch an underwater adventure game “Song of the Deep”.  Details of the collaboration are not clear now but as per a Fortune report, GameStop will be throwing its marketing and promotional might behind the game’s launch. The disc version for both Xbox and PS4 and PC will only be available at GameStop.

Performance

The following table shows the price movements of the major video game companies over both the past five trading days as well as the last six months:

Over the last five trading sessions, EA was the highest gainer, up 5.65% while Activision Blizzard (ATVI - Snapshot Report) disappointed the most as it lost 3.21%.

Over the last 6-month period, Activision Blizzard surged the most — nearly 31.43%. We believe that Activision’s huge library of content along with a host of other developments, the latest being the acquisition of MLG to boost its e-sports unit, will continue to fuel its rise. Notable developments include the buyout of King Digital for $5.9 billion and the launch of a film and television unit. Activision will be reporting its fourth quarter 2015 results on Feb 11, 2015.

However, Glu Mobile (GLUU - Snapshot Report) was down 63.93% over the same time frame due to under-performance of most of its releases this year. Moreover, in the third quarter of 2015, GAAP revenues were down over 2.37% while non GAAP revenues fell 23%. Also, the company gave a cautious guidance for the fourth quarter of 2015. The company is slated to report fourth quarter 2015 results on Feb 3, 2015.