Game On: U.S. video game spending fell 6% y/y in September, says Circana

“Game On” is The Fly’s weekly recap of the stories powering up or beating down video game stocks.

NEW RELEASES: Among this week’s most notable releases is Electronic Arts’ (EA) role-playing game “Dragon Age: The Veilguard,” which launches for PC, PlayStation 5 (SONY), and Xbox Series X/S (MSFT) on October 31. Also out this week is Square Enix’s (SQNXF) adventure title “Life Is Strange: Double Exposure,” which comes out on October 29 for PC, PS5, Xbox Series X/S, and Nintendo Switch (NTDOY). Meanwhile, Sony’s “Horizon Zero Dawn Remastered” launches for PC and PlayStation 5 on October 31.

CIRCANA SEPTEMBER: Last week, Circana analyst Mat Piscatella (UBSFY) “Star Wars Outlaws,” Take-Two’s (TTWO) “NBA 2K25,” and Warner Bros. Discovery’s (WBD) “Hogwarts Legacy.”

‘CALL OF DUTY’ ON GAME PASS: Leading video game analysts are saying that the launch of Activision’s “Call of Duty: Black Ops 6” into Xbox Game Pass on day one will decrease sales of the game but will lead to an increase in subscribers to Microsoft’s video game subscription service, Gamesindustry.biz’s Christopher Dring reported last week. Wedbush’s Michael Pachter said that putting the new “Call of Duty” on Game Pass could result in up to 6M fewer units sold, based on the idea that 25% of Game Pass subscribers may have purchased it anyway, though he adds that the move could lead to 3M-4M new additions to the service, the author says. Additionally, Ampere chief games analyst Piers Harding-Rolls believes that “Black Ops 6” going to Game Pass will result in a 10% increase in Game Pass Ultimate subscribers, or 2.5M new users, though some of that increase will be from people upgrading whatever Game Pass tier they already subscribe to, the author notes.

Following the game’s release on October 25, Dring reported that U.K. physical launch sales for “Black Ops 6” are 10% lower compared to last year’s “Call of Duty: Modern Warfare III,” according to data from GfK. The drop is “almost entirely” due to a decline in Xbox sales, which was inevitable with Game Pass, Dring said, adding that PlayStation 5 sales of the game remain “steady” year-over-year.

ROBLOX: Roblox (RBLX) is planning to institute several reforms following criticism of its child-safety policies and arrests of alleged child abusers using the service, Cecilia D’Anastasio and Olivia Carville of Bloomberg reported late last week. Users under 13 years old will need parental permission to access certain Roblox chat features, according to an email sent to parents which was reviewed by Bloomberg. Additionally, children under 9 years old will need permission to play games with moderate violence or crude humor, the email added. The company is also introducing a new type of account that will allow parents to monitor their child’s online activity and friends.

Just days after the report, Wedbush added Roblox to the firm’s “Best Ideas List” while keeping an Outperform rating on the shares with a $49 price target. The firm expects the company’s revenue growth to outpace the industry for the next three years on continued traffic growth, growth in advertising, the potential for adding recurring revenues from season passes and a change to the developer pay structure announced in September. Roblox has begun its transformation from a collection of games to a true platform, the analyst tells investors in a research note. Wedbush says that while it will likely take some time for game publishers to modify existing games like Monopoly Go! and PUBG Mobile so that they work on the Roblox platform, it expects to see traction as early as next year, “with a sharp uptick in revenues and profitability for Roblox thereafter.”

Click here to check out recent Media Buzz Sentiment on Roblox as measured by TipRanks.

EA ROTH: In a research note to investors on Tuesday, Roth MKM maintained a Neutral rating and $154 price target on Electronic Arts, though the firm is also raising its Q2 bookings view to $2.06B from $2.048B to reflect outperformance in its Sports franchises. The updated view reflects higher unit sales for “NCAA Football” – 6M units up from 5.5M units – and a smaller decline than previously anticipated for “Madden NFL,” though Roth MKM is also cutting its FY26 bookings and EPS view to $7.847B and $8.10 respectively from $8.048B and $8.58 as it pushes back expectations for the release of the next “Battlefield” game to FY27, the analyst tells investors in a research note.

MORE VIDEO GAME NEWS:

• PlayStation 5 sales in Japan are tracking ahead of PS4 sales, VGChartz reports
• Nintendo said a port of “Xenoblade Chronicles X” is coming to Switch March 30, 2025
• Sega (SGAMY) said that “Sonic x Shadow Geneartions” sold 1M units on its launch day, IGN reports
• The former Ubisoft (UBSFY) team that worked on “Prince of Persia: The Lost Crown” had been disbanded, with several members moving to other projects, including a new “Rayman” project, Insider-Gaming says