Friday, September 20, 2013
STOCK FOCUS: Consoles Stand Out At Tokyo Game Show
TOKYO (NQN)--With a record 352 exhibitors from 33 countries and regions participating in the Tokyo Game Show 2013, which kicked off Thursday, Sony Computer Entertainment Inc. (SCE) and Microsoft Corp., which are coming out with new game consoles, are turning a lot of heads.
Shun Tanaka, chief analyst at SMBC Friend Research Center Ltd., said SCE's PS4 and Microsoft's new Xbox One are garnering the most attention at the huge trade show at the Makuhari Messe convention center in Chiba Prefecture. But interest in Microsoft's console appears somewhat lower, probably because there is a limited selection of software available in Japanese, said Tanaka, who predicts the companies, which are trying to increase their devices' compatibility with smartphones, will try to expand their user base by encouraging people familiar with smartphone games to buy home game consoles.
Tanaka said he believes there are fewer social-media game exhibits this year than last. For instance, GungHo Online Entertainment Inc. (3765), developer of the Puzzle & Dragons game for smartphones, is pushing a version of the game for Nintendo Co.'s (7974) device. Tanaka said gamers have recently been taking another look at handheld and home game consoles.
Tomoaki Kawasaki, senior analyst at IwaiCosmo Securities Co., is focusing on PS4 sales in the U.S. for the Christmas shopping season, when demand is expected to be strong. Home game consoles are more popular in the U.S. than in Japan, he said. The PS4 will hit the market first in the U.S., ahead of their rollout in Japan next year.
While the earnings of social gaming firm such as DeNA Co. (2432) and Gree Inc. (3632) seem sluggish, their overseas sales are growing, Kawasaki said. Although game fee revenue from overseas markets tends to be smaller than in Japan, the number of overseas gamers is large. Given the size of the overseas market, the key to higher profits is how many popular games developers can create, Kawasaki said.
Kawasaki has noticed games that people of all ages can play, including GungHo's Puzzle & Dragons, have become popular recently. Thus social-gaming developers need to spend more on TV advertising and other types of sales promotion to create a virtuous circle in which a larger number of players boosts profits, and in turns creates greater recognition among gamers, pulling in still more users.