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Where’s the Money for Activision and Video Game Peers?

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Holiday video game sales offer a clue

Holiday video game sales figures shared by Sensor Tower and reported by Wall Street Journal reveal an interesting sector trend, and may help guide execution at games publishers Activision (ATVI), Electronic Arts (EA), Take-Two Interactive (TTWO), and others.

According to Sensor Tower, spending on mobile games, especially those meant for Apple’s (AAPL) iOS and Alphabet’s (GOOGL) Android devices, rose 53% YoY (year-over-year) to a record $967.6 million in the week between Christmas Day and the New Year.

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Free-to-play games attracting more spending

If we read between the lines of the holiday video game sales, we can surmise that free-to-play games are attracting more spending than games that charge an access fee. Activision, Zynga (ZNGA), and Glu Mobile (GLUU) are among the big free-to-play games publishers.

According to Newzoo BV, worldwide spending on smartphone and tablet games was $36.9 billion in 2016, while computer games attracted $31.9 billion in spending. Console games, such as those published by Nintendo and Microsoft (MSFT), attracted spending of $30.8 billion for the year.

Apple devices dominate holiday mobile sales

The Christmas holiday is a crucial period for game publishers as many people have more free time to play, and for mobile publishers, mobile device gifts during the holiday tend to bring on board more new players. Games optimized for Apple’s iOS devices can unlock even more gains.

According to Yahoo’s Flurry data, iOS has over the years dominated holiday mobile device activations. In 2016, iPhone and iPad accounted for 44% of total mobile activations, as compared to Samsung’s (SSNLF) 21% in the period between December 19 and December 25.

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