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Walt Disney ‘s ( DIS ) decision to end its Infinity interactive toy and video game product line could provide a lift to rivals in the toys-to-life business, namely Activision Blizzard ( ATVI ) and Warner Bros. Interactive Entertainment, a unit of Time Warner ( TWX ). Disney announced Tuesday that it is getting out of the self-published video game business and canceling its Infinity game series. Disney took a $147 million charge to its fiscal-second-quarter results to close the division. Disney’s Infinity exit leaves Activision’s Skylanders, Warner’s Lego Dimensions and Nintendo ‘s ( NTDOY ) Amiibo in the toys-to-life games segment. The toys-to-life genre involves the use of figurines or action figures that are placed on a small platform to interact with on-screen play for game consoles. “Disney’s announcement that they are exiting the toys-to-life category in a production capacity creates some interesting opportunities,” Cowen analyst Doug Creutz said in a report Thursday. “First, we think it paves the way for a significant bounce back in Skylanders sales this year; second, we suspect the Disney IP (intellectual property) will eventually wind up as part of WB’s Lego Dimensions franchise.” Toys-to-life video game sales, excluding sales of stand-alone toys, peaked in 2013 with the launch of Infinity, Creutz said. The category declined 20% in 2014 and was flat in 2015, he said. Nintendo launched Amiibo toys in 2014, but it doesn’t have a stand-alone game like Infinity, Skylanders and Lego Dimensions. Amiibo toys are integrated into existing Nintendo games. “With Activision now the only player planning to launch a toys-to-life game in 2016 (there will be some Dimensions playsets but no new game), if the category remains flat, Skylanders could grow by as much as 300%,” Creutz said. “This would be a source of surprise upside to Activision’s guidance. “In any case, the elimination of a competitor can only be a positive for both Activision and WB’s profitability from the category.” Cowen rates Activision stock outperform, with a price target of 44. Activision stock was up a fraction, above 37, in afternoon trading on the stock market today . The shares broke out of a cup-with-handle base at a 34.76 buy point on April 13. Cowen rates Disney and Time Warner stocks as market perform. Disney stock was down a fraction Thursday afternoon, while Time Warner was down more than 1%. RELATED: EA Stock Soars Like ‘Star Wars’ Millennium Falcon After Q4 Beat . Scalper1 News
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