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 launches is Nintendo-published (NTDOY) ocean exploration sim “Endless Ocean Luminous,” which releases exclusively for the Nintendo Switch on May 2. Also out this week is the PlayStation 5 (SONY) port of Microsoft’s (MSFT) 2018 multiplayer pirate game “Sea of Thieves.” The PlayStation version of the game launches April 30.

MICROSOFT GAMING RESULTS: Along with its quarterly report last week, Microsoft reported that third quarter gaming revenue rose 51% year-over-year, bolstered in large part to finally recognizing revenue from Activision Blizzard. Xbox content and services revenue rose 62% year-over-year in Q3, though Xbox hardware revenue fell 31% in the quarter. Gamesindustry.biz noted that six of the past eight quarters for Microsoft have seen declines in Xbox hardware revenue, with drops mostly ranging between 7%-13%.

On the company’s quarterly call, CEO Satya Nadella highlighted, notably, the benefits of releasing more Microsoft-owned games on other platforms, including the PlayStation 5 and Nintendo Switch. Nadella repeated an earlier report from TweakTown that seven games among the top 25 on Sony’s PlayStation Store earlier in the month were published by Xbox.

SQUARE ENIX ABANDONMENT LOSSES: On April 30, “Final Fantasy” and “Dragon Quest” publisher Square Enix (SQNXF) said its board of directors voted in March to revise the company’s approach to the development of high-definition games “with the intention of being more selective and focused in the allocation of development resources.” As a result of a close examination of the group’s development pipeline undertaken in keeping with this revised approach, the company expects to recognize approximately 22.1B yen, or about $140.9M, in content abandonment losses on its books for the fiscal year ended March 2024. Square Enix added that it is carefully reviewing its consolidated forecasts for the fiscal year ended March 2024 to assess the potential for impact from various factors.

According to IGN’s Wesley Yin-Poole, some analysts have said that “Final Fantasy VII Rebirth,” the publishers most recent major release, has struggled to meet sales targets. Poole also noted that the company has released many significant titles in the past year, including “Final Fantasy XVI,” “Foamstars,” and “Final Fantasy XIV: Dawntrail.”

OTHER STORIES TO WATCH:

• DZ Bank upgraded Tencent (TCEHY) to Buy from Hold (read more)
• Microsoft announced its Xbox Games Showcase will air on June 9, to be immediately followed by a direct for a deliberately unnamed entity (read more)
• Amazon Prime’s (AMZN) “Fallout” TV show drew 65M viewers in its first 16 days of availability, Variety reports (read more)
• Captivision (CAPT) is partnering with Activision’s “Call of Duty: Mobile” and Framework for the recent installation at the Framework in the Desert afterparty in Coachella Valley (read more)