What You Missed This Week in Video Games

“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 notable game releases is Microsoft’s (MSFT) 2022 title “Grounded,” which was ported to Nintendo Switch (NTDOY), PlayStation 4 (SONY), and PS5 on April 16. Also out this week is Square Enix’s (SQNXF) “Final Fantasy XVI: The Rising Tide,” a downloadable expansion to 2023 PlayStation 5 game “Final Fantasy XVI,” which releases April 18.

TAKE-TWO LAYOFFS: On Tuesday, the board of directors of Take-Two (TTWO) approved a cost reduction program to identify efficiencies across its business and enhance the company’s margin profile, while still investing for growth. As part of these efforts, the company said it is “rationalizing its pipeline and eliminating several projects in development and streamlining its organizational structure, which will eliminate headcount and reduce future hiring needs.” The company estimates that it will incur approximately $160M-$200M in total charges in connection with the plan. The company expects $40M-$60M of the total charges to result in future cash expenditures. The total charge consists of approximately $120M-$140M related to title cancellations, approximately $25M-$35M associated with employee severance and employee-related costs, and approximately $15M-$25M related to office space reductions. The plan is expected to be largely complete by December 31 and will reduce the company’s workforce by approximately 5%.

Following the move, Jefferies said it believes the 5% headcount reduction and cancellation of several titles is a positive for the stock as the moves should drive better margins in FY26 post the “Grand Theft Auto VI” launch. The FY25 guidance and “GTA VI” are “likely to remain front-of-mind” into fiscal Q4 results, added the analyst, who maintained a Buy rating and $195 price target on Take-Two shares.

FALLOUT: Amid the release of the Amazon Prime Video (AMZN) series “Fallout” last week, many games in the long-running role-playing game franchise saw an increase in both player count and sales. Circana analyst Mat Piscatella said that “Fallout 76,” which Microsoft-owned Bethesda released in 2018,” has recently seen its highest engagement rate on Xbox Series consoles since October 2022. Additionally, Kotaku’s John Walker noted that, according to Steam DB, 2015’s “Fallout 4” went from peak of 24,000 active players last week to over 83,000 this past weekend on Steam, with 2010’s “Fallout: New Vegas” and “Fallout 76” also seeing notable spikes in player counts on the PC gaming platform. Walker also pointed out that “Fallout 4” and “Fallout 76” are also charting higher on Steam’s sales charts over the past week. The Fly notes that Bethesda, which Microsoft acquired in 2021, has been publishing games in the “Fallout” series since 2008’s “Fallout 3.”

Meanwhile, Bethesda announced on April 11, the same day the Amazon Prime series first became available, that “Fallout 4” would receive a current-generation console upgrade on April 25. The title, which originally launched for PC, PlayStation 4, and Xbox One, will be optimized for Xbox Series X/S and PlayStation 5 for free, with players getting stability improvements and fixes, as well as Performance Mode and Quality mode settings.

U.K. MARKET: According to UKIE’s latest Consumer Market Valuation report, the United Kingdom’s games market was worth GBP7.82B last year, a 4.4% jump from 2022’s revised value of GBP7.49B, Gamesindustry.biz’s Marie Dealessandri (read more)

Blizzard Entertainment and NetEase (NTES) have renewed their publishing agreement (read more)

Electronic Arts (EA) is raising the price of its EA Play subscription services, Gamesindustry.biz reports (read more)

Sony is getting ready to release a more powerful version of the PlayStation 5, Verge says (read more)

“Final Fantasy VII Rebirth” was the best-selling game in Japan in March, Gamesindustry.biz says (read more)