Survey Says These Three Gaming Giants Poised For Big Holiday Season

A survey conducted by Nielsen Hldg NV (NYSE:NLSN) has revealed the games most sought-after by gamers for the upcoming holiday season, and happily for investors, many of them are from the publicly-traded companies which are the most popular among the investors that we track as part of our small-cap strategy, which has returned 118% in the last 36 months, beating the market by more than 60 percentage points (read more details here).

More than 4,800 gamers were surveyed for the study, which uses a combination of the current hype for the game coupled with the hype of past games in the franchise to generate an anticipation rating. Leading the charge for multi-platform games was Activision Blizzard, Inc. (NASDAQ:ATVI)’s Call of Duty: Black Ops 3, whose predecessor Black Ops 2 has sold over 27 million copies according to data from VGChartz.

Black Ops 3 earned an anticipation score of 98% in the study, which was topped only by the perfect 100% rating for Microsoft Corporation (NASDAQ:MSFT)’s Halo 5: Guardians, an Xbox One-exclusive title being developed by 343 Industries, which took over the series from Bungie beginning with Halo 4. Despite the perfect anticipation score, Microsoft will be looking for a bit of a rebound with Halo 5 after the fourth installment fell well short of matching Halo 3’s 12 million sales, selling just 9.5 million copies.

Bethesda Softworks’ Fallout 4 and Ubisoft Entertainment’s Assassin’s Creed: Syndicate ranked second and third on the multi-platform list with scores of 95%. They were followed by two Electronic Arts Inc. (NASDAQ:EA) games: Need for Speed and Star Wars: Battlefront, which scored 92% and 88% respectively. Rounding out the multi-platform list were Square-Enix’s Rise of the Tomb Raider and Harmonix’ Rock Band 4, the latter being somewhat of a surprise inclusion after the music rhythm genre mostly flamed out several years ago. It has been five years since the previous installment however, which may have created pent-up demand for its return.

Moving on to console-specific games, Sony Corp (ADR) (NYSE:SNE) has enjoyed a turnaround partly thanks to its success thus far with the PlayStation 4, which has dominated Microsoft Corporation (NASDAQ:MSFT)’s Xbox One in sales since the near-simultaneous release of the two consoles last year. Like Microsoft with Halo 5, Sony Corp (ADR) (NYSE:SNE) had just one exclusive title make the list, that being Uncharted: The Nathan Drake Collection. Nintendo on the other hand had several exclusive games for both the Wii U and handheld 3DS make the list including Animal Crossing: Amiibo Festival, Mario Tennis: Ultra Smash, and The Legend of Zelda: Tri Force Heroes. Meanwhile, Activision Blizzard, Inc. (NASDAQ:ATVI)’s Starcraft II: Legacy of the Void was the most-anticipated PC-exclusive game.

Let’s briefly run you through the trading activity in these stocks among the elite investors we monitor at Insider Monkey. 19 investors in our database held $368 million worth of Sony Corp (ADR) (NYSE:SNE) shares on June 30, while 107 held $18.32 billion in Microsoft Corporation (NASDAQ:MSFT) shares. Given that gaming makes up only a fraction of the business activity of the two tech giants (especially in the case of Microsoft), the stock ownership does not represent the sentiment investors have solely towards their gaming operations.

In Activision Blizzard, Inc. (NASDAQ:ATVI) and Electronic Arts Inc. (NASDAQ:EA) we can get a much clearer picture of investors’ thoughts on the gaming sector, and sentiment was close when it came to the two game developers. 47 firms we track held 8.50% of EA’s outstanding shares, valued at $1.79 billion, while 46 firms held 8.90% of Activision Blizzard’s shares, worth $1.57 billion. Each stock was also popular in the second quarter, as sales of the current generation of gaming consoles continued to exceed expectations (the console industry was supposed to be dead by now after all). Just 41 firms had held each stock on March 31.

In terms of individual investors, Philippe Laffont’s Coatue Management was a major shareholder of both gaming stocks, holding 6.41 million shares of Activision Blizzard and 5.75 million shares of Electronic Arts Inc. (NASDAQ:EA). Laffont trimmed both positions slightly during the second quarter. Cliff Asness’ AQR Capital Management was also a big fan of both companies, owning 2.86 million shares of Activision Blizzard and 4.61 million shares of EA. Asness added more shares to both of those positions during the quarter.

Disclosure: None