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Junior Could Get A College Scholarship For Playing Video Games

Parents worried that their kids are playing too many video games might need to rethink their perspective. At least one university plans to offer academic scholarships for e-athletes, people who play competitive video games. The University of California, Irvine, announced Wednesday that it will offer as many as 10 academic scholarships to students on its e-sports team. UC Irvine is launching a major e-sports initiative in the fall, the first of its kind at a public research university. The initiative includes a state-of-the-art arena equipped with high-end gaming PCs, a stage for “League of Legends” competitions and a live webcasting studio, which will be constructed at the UCI Student Center. “League of Legends” is a multiplayer online battle arena and real-time strategy video game produced by Riot Games, now a unit of Tencent Holdings ( TCEHY ). “ UCI eSports will be built on four pillars: competition, academics, entertainment and community,” Thomas Parham, vice chancellor for student affairs, said in a statement. “We hope to attract the best gamers from around the world, and our academic programs in computer gaming science, digital arts, computer science, engineering, anthropology, law, medicine, neuroscience and behavior create a strong foundation for research and inquiry related to gaming.” UCI already is home to a dedicated gaming community. College Magazine ranked UCI the No. 1 school for gamers in 2015. A recent survey of UCI students found that 72% identify as gamers, and 89% support the creation of an e-sports team, the school said. The computer game science major in the Donald Bren School of Information & Computer Sciences is the largest in the country. Los Angeles-based Riot Games has pledged its support for the e-sports initiative and will work with UCI to offer a premium “League of Legends” gaming experience. Custom gaming computer maker iBuyPower is equipping the 3,500-square-foot eSports arena with 80 of its high-end gaming PCs loaded with the most popular video game titles. E-sports is a hot growth area for video game companies. Major game publishers Activision Blizzard ( ATVI ), Electronic Arts ( EA ) and Take-Two Interactive Software ( TTWO ) have launched their own e-sports businesses. RELATED: Everybody Into The Pool! Take-Two Joins Esports Trend .  

NetEase Sees Dip In Mobile And PC Games, Gets Hurt By Tax Change

China gaming company  NetEase ( NTES ) is being hit by declining user activity for both its PC and mobile games and an “unfavorable” tax rate change, according to an analyst. “Cross-border commerce continues to grow, but we are cautious on likely negative catalysts, including government regulations, currency exchange fluctuation and intensifying competition,” wrote ITG Investment Research analyst Henry Guo in a research note Monday. Seasonality and competition are offsetting the company’s cross-border e-commerce momentum in Q1, he said. “Longer term, we continue to see multiple potential risks to NetEase’s e-commerce efforts, considering the uncertainties related to government policy and tax regulations on cross-border commerce and increasing competition from established e-commerce players in the market,” Guo wrote. NetEase stock closed Monday at 140, down 3.1%. NetEase stock has risen 36% in the past 12 months but is down 22% since early January. Shares touched a record high above 186 near the end of 2015. Three China tech firms — Internet search leader Baidu ( BIDU ), e-commerce king Alibaba Group ( BABA ) and Tencent Holdings ( TCEHY ), China’s leader in messaging and gaming — lead the way in China’s Internet arena. NetEase is another leader on China’s Web, as is e-commerce company JD.com ( JD ). The company said that revenue from online games, its biggest segment, more than doubled in Q4, thanks to growth in its original mobile games. The company’s “Westward Journey Online” and “Fantasy Westward Journey” came in as the top two games in the Apple ( AAPL ) iOS China app store in the fourth quarter, NetEase said. While the company now has multiple mobile games in testing, Guo said, few are available for public testing. “As such, we haven’t seen a step-up in game user activity in the quarter, which we attribute to a lack of promotions or incentives,” he said. Guo said he has modeled NetEase’s ad revenue to decline 10% quarter over quarter in Q1 2016, “a significant improvement from the year-ago period’s 18% quarter-over-quarter decline, reflecting NetEase’s heightened immunity to advertising seasonality, such as the Chinese New Year.” NetEase is best known for its desktop PC games and has had a lucrative exclusive license for Activision Blizzard ( ATVI )‘s “World of Warcraft” in mainland China since 2009. The company also develops its own games, mostly the multiplayer variety played on desktop PCs and mobile devices. Apple stock closed down a fraction at 105.19, while JD.com stock fell 2% to close at 25.82. Alibaba stock rose a fraction to close at 76.48, while Baidu stock rose a fraction to 185.17.

NetEase Dragged Under By Sinking Profit Margin For Online Games

NetEase ( NTES ) stock plunged by double digits Thursday after the China-based gaming and Internet company saw its gross margin shrink in Q4, even as its revenue and earnings beat analyst expectations. After falling after hours Wednesday following the company’s earnings release, NetEase stock was down 16% in midday trading in the stock market today , near 134. Still, NetEase stock is up 31% over the past 12 months and is ranked No. 3 in Wednesday’s midweek update of the IBD 50 list of top-performing stocks. This is despite a tough time for many Asian stocks. Amid ongoing worries about slowing growth in China, the Shanghai composite fell more than 6% Thursday, its biggest drop in more than a month. NetEase posted a gross profit margin for its online games business of 67.2% in Q4, down from 67.9% in Q3 and 76% in Q4 2014, with the declines mainly due to increased revenue contributions from lower-margin mobile games. The company said revenue from online games, its biggest segment, more than doubled, thanks to growth in its original mobile games. The company’s “Westward Journey Online” and “Fantasy Westward Journey” came in as the top two games in the Apple ( AAPL ) iOS China app store in the fourth quarter, NetEase said. NetEase Now Has 80-Plus Mobile Games NetEase has been keeping up “a very good momentum of rolling out the games, especially the mobile games, to the market. And if you look back in the past quarter, which is the fourth quarter of 2015, we have come up to 80-plus mobile games in the market. That’s compared to about 50-plus in the third quarter of 2015,” NetEase acting CFO Onward Choi told analysts during an earnings call late Wednesday. “We saw year-over-year net revenue increases in the fourth quarter of 103.2% from online games, 68.1% from advertising services and 355.5% from email, e-commerce and others,” NetEase CEO William Ding said in a statement. Fourth-quarter revenue jumped 128% in local currency to RMB 7.90 billion ($1.22 billion), above the RMB 7.69 billion analysts polled by Thomson Reuters had forecast. The company said earnings per American Depositary Receipt were RMB 16.34 ($2.52), up 69% in local currency. Analysts had expected RMB 14.79. NetEase did not provide Q1 guidance. Analysts polled by Thomson Reuters expect net revenue to rise 126% in local currency to RMB 8.27 billion ($1.26 billion). Analysts expect adjusted earnings per share to rise 45% to RMB 13.97 ($2.14). NetEase is best known for its desktop PC games and has had a lucrative exclusive license for Activision Blizzard ’s ( ATVI ) “World of Warcraft” in mainland China since 2009. The company also develops its own games, mostly the multiplayer variety played on desktop PCs and mobile devices. NetEase is a home-field favorite on China’s gaming scene, ranking a close second to Internet titan Tencent Holdings ( TCEHY ). Looking to bring its most popular titles to more English speakers, Beijing-based NetEase opened its first U.S. office, in the San Francisco suburb of Redwood Shores, Calif., early last year. Among other Chinese names, online-discount retailer Vipshop Holdings ( VIPS ) was down 12% in midday trading Thursday after reporting better-than-expected fourth-quarter earnings but weaker first-quarter revenue guidance. Vipshop is facing more competition in the flash discount sales category from Alibaba Group ( BABA ) and JD.com ( JD ). Alibaba’s U.S. stock was down 1.5% midday Thursday, while JD.com was down 3.5%.