Cowen cuts console game spending estimates, noting challenges from delays and currency
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Cowen is curtailing its expectations for console videogame spending this year, pointing to additional hurdles from game delays as well as foreign exchange since its last look at the space.
The firm expects 2022 console game spending to fall 7%, down from a previous estimate for a 1% decline, analyst Doug Creutz says. But that's at least in part due to accounting for currency exchange concerns, since the prior number didn't include that.
Of the six-percentage point cut to estimates, about 1.5 points are due to foreign exchange, Creutz said; another 1.5 points due to changes to game release slates; and 3 percentage points come from lower second-quarter performance vs. Cowen estimates.
Against some tough 2021 pandemic comparisons, industry sales fell 13% year-over-year in the second quarter, with mobile games leading the way down.
On the plus side, he's expecting a more normal sequential bump in Q3, improving the year-over-year comparison, with a credit to annual sports title releases. (To that end, Madden NFL 23 (NASDAQ:EA) launched worldwide Friday.)
But the key to the outlook, Creutz says, is the number of game delays out of 2022 that have piled up since late June - and by the by, he says those delays mean less competition for existing live service titles: the new annual releases of Call of Duty (NASDAQ:ATVI) and of FIFA and Madden (EA).
Earlier: Videogame industry sales fell year-over-year again in July, but at a moderating rate.
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