What You Missed This Week in Video Games

“Game On” is The Fly’s weekly recap of the stories powering up or beating down video game stocks.

NEW RELEASES: Among this week’s bigger game releases is Electronic Arts’ (EA) “EA Sports College Football 25,” the first such game in over a decade. The title releases July 19 for PlayStation 5 (SONY) and Xbox Series X/S (MSFT). Also out this week is Nintendo’s (NTDOY) competitive party game “Nintendo World Championships: NES Edition,” which releases exclusively on Switch July 18. Meanwhile, Capcom’s (CCOEY) action-strategy title “Kunitsu-Gami: Path of the Goddess” releases July 19 for PC, PlayStation 4, PS5, Xbox One, and Xbox Series X/S.

ANALYSTS MIXED ON EA: Ahead of the release of the highly-anticipated “EA Sports College Football 25,” multiple securities analysts raised their price targets on EA, with Oppenheimer saying it has observed an “overwhelmingly positive” response to the game since its official reveal trailer a month ago, and that the firm believes the company has delivered on the promise of building the game from the ground up and then some. While the title’s potential cannibalization of “Madden NFL 25” remains a key risk to FY25 guidance, Oppenheimer is incrementally more comfortable with the college football sim’s potential to outperform management expectation and the downside risk from “Dragon Age: The Veilguard” in FY25.

Meanwhile, Citi downgraded Electronic Arts to Neutral from Buy this week, noting that EA’s shares have risen 15% on optimism around the upcoming release of “College Football 25.” While bullish on the release, Citi has three concerns: potential weakness at “Apex Legends,” potential crowding out from the release of “Grand Theft Auto VI” in Q4 of 2025, and macro risk if consumer spending moderates. As such, the firm sees limited upside in shares of Electronic Arts.

Additionally, Morgan Stanley said it believes that pre-order data for “College Football 25” is showing strong demand for the game. However, the firm believes the contribution from the game “may already be fairly priced today” and it maintains an Equal Weight rating and $140 price target on EA shares.

Click here to check out recent Media Buzz Sentiment on Electronic Arts as measured by TipRanks.

GAME PASS CHANGES: Last week, Microsoft confirmed price increases for various Game Pass tiers and announced that a new Game Pass tier is on the way. Soon, new users will not be able to subscribe to Xbox Game Pass for console, though current users will be allowed to maintain their subscription. Instead, new users will be able to sign up for Xbox Game Pass Standard, which includes Xbox’s back catalogue, but does not include Xbox-published games on day one of release. Meanwhile, Xbox Game Pass Ultimate, the highest tier that also includes access to PC Game Pass and Xbox Cloud Gaming, will get a price increase to $19.99 per month from $16.99, the author says. PC Game Pass and Game Pass Core will also receive price increases, with all price hikes for recurring billing set to take effect on September 12, 2024.

Following the announcement, multiple industry analysts said that while the turn may be frustrating for Xbox consumers, such changes were inevitable, according to IGN’s Rebekah Valentine. Such analysts are saying that the Xbox Game Pass changes are a business reality that basically every subscription service has similarly embraced amid inflation, slower subscription adoption, and demand for non-stop growth. For example, Circana anlyst Mat Piscatella told Valentine that the subscription market in general has flattened over the past few years, with U.S. spending on game subscription services actually down slightly year-to-date in 2024, with cluod gaming offerings not being met with enough enthusiasm from players.

SONY/POCKETPAIR PARTNERSHIP: Sony Music Entertainment, its subsidiary Aniplex, and video game maker Pocketpair have established a joint venture, Palworld Entertainment Inc., to expand and develop new businesses associated with the hit game, “Palworld.” The announcement was made Wednesday in a joint release by all three companies. “Palworld,” a multiplayer open world survival game created, produced and published by Japanese developer, Pocketpair, became the breakout hit of 2024 when the total number of players surpassed 25 million after only one month in release. “Palworld” is currently available on PC, Xbox Series X/S, Xbox One, and through Xbox Game Pass, but not at this time available on any PlayStation platform.

BAIN FORECAST: According to a Bain & Company financial forecast, the global video game industry’s revenue could exceed $300B by 2027, Insider Gaming’s Grant Taylor-Hill (TCEHY) will shut down its free-to-play game “Synced,” Gamesindustry.biz reports (read more)

CD Projekt Red (OTGLY) said that most of its current projects are in the “early stages,” vg247 reports (read more)

Sales of Bandai Namco’s (NCBDY) “Elden Ring” jumped 470% in the U.K. in June, Gamesindustry.biz says (read more)

Jefferies initiated coverage of Take-Two (TTWO) with a Buy rating (read more)