Investors Don’t Expect Video Game Demand Growth to Slow Any Time Soon

There’s substantial demand for video games. In fact, according to the NPD Group, U.S. gamers bought $11.2 billion worth of video game content just in the third quarter. That means American gamers increased their spending on computer, mobile, and console products by 24% year over year. Plus, with new console launches from Sony and Microsoft, fourth quarter sales could be even higher. “Surging demand indicates the United States could have the world’s largest video industry by revenue for the second half of 2020,” reports The Burn-In. “If that happens, the U.S. gaming market value will have topped China’s for two quarters in a row. That could mean America could hold onto the top gaming region crown for Q1 2021.” That excitement is creating big opportunity for related companies, such as Enthusiast Gaming Holdings Inc. (TSX:EGLX)(OTCQB:ENGMF), Activision Blizzard Inc. (NASDAQ:ATVI), Electronic Arts Inc. (NASDAQ:EA), Ubisoft Entertainment (OTC:UBSFF), and Microsoft Corporation (NASDAQ:MSFT).

Enthusiast Gaming Holdings Inc. (TSX:EGLX)(OTCQB:ENGMF) BREAKING NEWSEnthusiast Gaming Holdings Inc., announced results for the third quarter ended September 30, 2020. “The third quarter was another record quarter for us. The acquisition of Omnia in August was transformational, and Omnia’s assets and viewers are proving to be a natural fit for our ecosystem,” commented Adrian Montgomery, chief executive officer of Enthusiast Gaming. “We are on a mission to prove the earnings power of our platform of 300 million gamers monthly. We are growing rapidly and look forward to continued strong performances in the fourth quarter and in 2021.”

Third Quarter 2020 Highlights:

- Reported revenue was $16.3 million, an increase of 133% compared to $7.0 million in the second quarter;

- Pro forma revenue was $31.7 million for Q3 2020, an increase of 17% compared to $27.2 million in the second quarter;

- Reported gross margin was $4.1 million, an increase of 28% compared to $3.2 million in the second quarter;

- Pro forma gross margin was $5.3 million, an increase of 18% compared to $4.5 million in the second quarter;

- Reported operating expenses were $8.2 million, an increase of 9% compared to $7.5 million in Q2;

- Pro forma operating expenses were $9.3 million, an increase of 4% compared to $8.9 million in the second quarter;

- Net loss and comprehensive loss for Q3 was $8.0 million, compared to $6.5 million in the second quarter, resulting in a net and comprehensive loss per share, basic and diluted, of $0.10 and $0.09, respectively;

- Pro forma total views across written and video content were 10.6 billion for Q3, and 32.2 billion year-to-date;

- Direct sales were approximately $1.0 million, an increase of 67% compared to the second quarter;

- Closed the acquisition of Omnia Media on August 30, 2020;

- Closed a $17.25 million bought deal public offering on August 31, 2020;

- Introduced two new paid subscription offerings, Siliconera+ and The Escapist+; and,

- Added three senior media executives to the leadership team.

The Company completed the acquisition of Omnia Media Inc. on August 30, 2020 (see press release dated August 31, 2020). The unaudited condensed consolidated interim financial statements of the Company for the three and nine months ended September 30, 2020 include the financial results of Omnia from August 30 through September 30, 2020. References to “pro forma” figures herein will assume the acquisition of Omnia took place on the first day of the respective period. The Company is providing pro forma quarterly information for 2020 as a number of mergers and acquisitions closed in the second half of 2019 reduce the comparability of year-over-year figures. The Financial Statements contain comparative figures for the three and nine months ended September 30, 2019. Results are presented in Canadian dollars.

Other related developments from around the markets include:

Activision Blizzard Inc. (NASDAQ:ATVI) announced third-quarter 2020 results. “Our teams continue to execute our growth plans with excellence during incredibly challenging circumstances,” said Bobby Kotick, Chief Executive Officer of Activision Blizzard. “We are on a path to deliver sustained long-term growth across our fully-owned franchises. With confidence in our ability to continue to execute, we are raising our outlook for the year and remain enthusiastic for our growth prospects next year.”

Electronic Arts Inc. (NASDAQ:EA) announced preliminary financial results for its second fiscal quarter ended September 30, 2020.“Thanks to the incredible work of our teams and everything they continue to do for players while working from home, we’re delivering more fan-favorite games, growing our leading live services, and engaging more players across more platforms than ever before,” said CEO Andrew Wilson. “Our business has grown significantly this year, and we are projecting continued expansion into FY22 and beyond.”

Ubisoft Entertainment (OTC:UBSFF) announced exceptional player activity for Assassin’s Creed Valhalla, the latest iteration of the Assassin’s Creed franchise, released on November 10. The number of active players on launch day for Assassin’s Creed Valhalla doubled that of Assassin’s Creed Odyssey, a trend that is expected to continue as sales of the new generation of consoles increase. A testament to Assassin’s Creed Valhalla delivering on players’ expectations for its fascinating world and immersive narrative, the game has reached high levels of viewership and engagement on Twitch and YouTube that surpass any Ubisoft game launch to date. “We are humbled by the reception from the players and extremely proud of what our teams have accomplished with Assassin’s Creed Valhalla, which builds on the amazing success of its predecessors,” said Yves Guillemot, Ubisoft co-founder and CEO. “In the context of COVID-19, shipping Assassin’s Creed Valhalla on no less than seven platforms is an incredible achievement for all of the teams involved around the world. We are excited to greet players on Xbox Series X|S and PlayStation 5 with a game that unleashes the power of the new hardware. This paves the way for an exciting holiday, with Assassin’s Creed Valhalla set to be one of this season’s biggest hits.”

Microsoft Corporation (NASDAQ:MSFT) named Christopher Young as executive vice president of business development. Young will report directly to Microsoft Chief Executive Officer Satya Nadella. A respected voice in technology and cybersecurity, Young most recently served as chief executive officer of McAfee, one of the largest cybersecurity companies in the world. In 2017, Young led the initiative to spin McAfee out of Intel as a standalone company and has since spearheaded McAfee’s mission to protect systems and data of customers around the globe. Previously, Young held senior leadership positions at Cisco, VMware, RSA and AOL.

Legal Disclaimer / Except for the historical information presented herein, matters discussed in this article contains forward-looking statements that are subject to certain risks and uncertainties that could cause actual results to differ materially from any future results, performance or achievements expressed or implied by such statements. Winning Media is not registered with any financial or securities regulatory authority and does not provide nor claims to provide investment advice or recommendations to readers of this release. For making specific investment decisions, readers should seek their own advice. Winning Media is only compensated for its services in the form of cash-based compensation. Pursuant to an agreement Winning Media has been paid three thousand five hundred dollars for advertising and marketing services for Enthusiast Gaming Holdings Inc. by a third party. We own ZERO shares of Enthusiast Gaming Holdings Inc. Please click here for full disclaimer.

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