3 Major Gaming Players Feel the Heat from This Unexpected New Enemy
The gaming-console ecosystem led by Sony (NYSE:SNE), Microsoft (NASDAQ:MSFT), and Nintendo is under attack. Mobile games have been cutting into console gaming shares for a while, with an 18 percent decline between quarter one of 2011 and quarter one of 2012. Now, the makers of the Playstation, XBox, and Wii could be facing new competition from cable providers.
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According to Bloomberg, AT&T (NYSE:T), Verizon (NYSE:VZ), and Time Warner Cable (NYSE:TWC) want to kill the console by offering robust gaming experiences through their cable subscriptions. Companies like OnLive have tried this approach in the past and largely failed, but cable providers bring big bucks, huge data centers, and large subscriber bases to the table. Some are expecting the video game market to hit $81 billion by 2016, with online sales leading the way. Cable providers could be uniquely situated to lead the charge in cloud-based and streaming game offerings. With clever innovations like the ability to use a smartphone as a controller, cable providers could roll out these services as early as 2013.
Electronic Arts (NASDAQ:EA) closed down 4.7 percent on September 25th and finished the trading week at $12.69. The game publisher has been struggling recently, losing 38.4 percent of its share value this year. Activision Blizzard (NASDAQ:ATVI) was also down 3.44 percent despite the launch of the expansion to the company’s massively popular World of Warcraft game, finished the trading week at $11.27. Cable operators moving into the game distribution could be good for these large publishers, as console sales have been declining.