Brazil is the home country of many soccer talents and is honored by soccer fans around the world. The 2014 World Cup in Brazil will act as a major facilitator for the company’s “FIFA” franchise of soccer games. The company’s most recent installment in the “FIFA” franchise, FIFA 13, sold over 14.5 million units. This was up 30% year-over-year and added $850 million to the company’s total revenue in the 2013 fiscal year. This segment contributed 24% of the company’s total revenue. Now the company is planning to launch a new installment, FIFA Brazil World Cup 2014, in April 2014. It is expected to generate revenue of $660 million in the first quarter of fiscal year 2015 with the sale of over 3 million units.
Games upgrade will lift the revenue
Konami Corp (ADR) (NYSE:KNM)’s “Pachinko” and “Pachislot” slot machine manufacturer revenue declined to $57.7 million in fiscal year 2013, down from $193.7 million the previous year. The decline was due to the delayed release of its new slot machine products. The company will likely recover in the coming fiscal year with the release of an upgraded version of Rumble Roses 3D. The new product will feature a 3D liquid crystal display which can be used without 3D glasses, allowing customers to play in 3D with the naked eye. This game has seen the huge demand worldwide, and the upgraded version will bring an upsurge of $200 million to this segment in the 2014 fiscal year.
The company has also been developing and releasing games in the “Metal Gear” franchise since 1987. “Metal Gear” is a series of adventure games which are played on personal computers and home consoles. With the rising demand for on-the-go games, a new entry in the franchise known as Metal Gear Solid Ops was released for smartphone users earlier this year. This is a 3D game which was released for iOS and Android users. It generated additional revenue of $3.2 million in fiscal year 2013, and will generate $9.43 million by the end of fiscal year 2014.
Investor takeaway
Activision Blizzard, Inc. (NASDAQ:ATVI)’s publishing of a new social game and the next generation of the “Call of Duty” franchise will generate new revenues for the company.
Electronic Arts Inc. (NASDAQ:EA) will capitalize on the launch of FIFA Brazil World Cup 2014. In addition, it will also launch new games for smartphone users which will increase the company’s revenue.
Konami Corp (ADR) (NYSE:KNM)has a long history of successfully launching games in the “Metal Gear” series and upgrading their existing slot machines. This will create more demand in the future, which is beneficial for investors.
Looking at the potential of all the companies, I recommend a buy for all three stocks.
While Activision Blizzard, Inc. (NASDAQ:ATVI) and Microsoft have been taking the headlines when it comes to console gaming, Fools following the gaming sector would do well to also keep tabs on Electronic Arts Inc. (NASDAQ:EA).
Shweta Dubey has no position in any stocks mentioned. The Motley Fool recommends Activision Blizzard. The Motley Fool owns shares of Activision Blizzard.
The article What Could These Three Gaming Companies Do for You? originally appeared on Fool.com.
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