2024-04-24 01:10:08 ET
Summary
- Infinite Wealth had phenomenal player counts for months out from release, and passed the million unit sale threshold in days.
- We think that there could be a beat of the new downward revised forecasts in the upcoming quarter, reversing some of the pain from the downward revision.
- We still also believe in continued performance from Pachinko.
- With a value case for downside protection and margin of safety and a potential earnings beat case in the consumer segment, we really like Sega Sammy.
Sega Sammy ( SGAMY )( SGAMF ) is one of our favourite ideas in the gaming space, which we've been covering for a year now. In our last article we focused on Pachinko, but now we are focused on the gaming and entertainment segment, which has been the reason for underperformance. We like Sega because it's the discount Nintendo ( NTDOY ). It has strong franchises, but isn't quite as consistent as Nintendo, which can almost do no wrong with Zelda and Mario continuing to lead their categories and impress critics and audiences. We hope for improvement, and indeed there is quite a lot going on. In chats with IR, the company has acknowledged that they are fully aware that newest titles from Creative Assembly, their UK studio famous for the Total War franchise, are not good. The audience rightfully thinks Pharoah was a lazy reskin. Creative Assembly was also responsible for HYENAS, which was a terrible idea to release a live-service shooter in an era where the space cannot possibly be more saturated. It had an interesting heist angle, and some beta testers even liked it, but despite being an already finished game with all money to develop it already spent, it was canned on the eve of release because apparently marginal benefit was exceeded by the marginal costs of running that live service game. The company is restructuring these underperforming businesses....
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Sega Sammy: Infinite Wealth Could Drive A Q4 Beat Against The New Forecasts