I
t was an event that screamed
‘MONEY’ – like proper pin-
striped ’80s money, NBA ballers
at a gentlemen’s club type of coin.
This past September, French video
game giant Ubisoft commandeered
the British Museum for the launch of its
latest Assassin’s Creed instalment, Origins.
Figures dressed as the ancient dog-god
Anubis silently (and eerily) ushered GQ into
a candlelit, hieroglyph-bedecked enclave.
The air hung heavy with incense and Gallic
triumphalism as a select gathering dined
beside the Rosetta Stone.
Such a display of wealth does come
with some foundation – in 10 years and 10
iterations, the franchise has sold in excess
of 105 million units (retail price of each
roughly $100), expanded into comics,
novels, a $300m-grossing movie, art books,
a clothing line and planned standalone
mobile game.
It’s an entertainment behemoth. And
but one of several within the company stable
( Jake Gyllenhaal’s reportedly signed up to
the film of its The Division franchise) t hat
informs an industry that’s forecast to hit
$140bn by the end of the year.
In terms of competition, titles like
EA Sports’ FIFA Football (first released
in 1993 with a version every year since)
and Activision’s Call of Duty (debuting in
2003 and with 13 sequels) generate similar
amounts of head-spinning profits – the latter
seeing nearly $20bn in sales worldwide, with
its latest addition, Call of Duty: W WII,
released this month.
Earlier this year, Nick Griffin, head of
investments at Australian equity manager
Munro Partners told Livewire, “The network
effects of Google, Facebook, or Amazon are
now so strong that only regulation could
break them. And if I had to point to the next
thing that comes along that could potentially
have the same network effect, it’s probably
video game stocks.”
That’s not to claim that such shares are
going cheap – and nor is this the stock
equivalent to a one-night stand given the
long play required.
A single Ubisoft share will cost you around
$95 – but they’ve delivered a 70 per cent spike
the past 12 months. Meanwhile, EA’s shares
have climbed over 700 per cent in the past
five years, with Griffin adding, “We started
looking at this three years ago, it’s been a
good investment for us and I think it’s got
about three years to go.”
The reasons are manifold. First, new
technologies like Virtual Reality (VR) and
Augmented Reality (AR) – see the Pokemon
STOCKS
TO
WATC H
ACTIVISION
BLIZZARD
Which owns seven
franchises with
more than $1bn
in life-to-date
revenue.
NINTENDO
Ahem, game-
changing new
hardware in the
form of the Switch
and key titles like
The Legend Of
Zelda and Super
Mario Brothers
meant nearly 150
per cent profit
surge forecast
this year.
ADVANCED
MICRO DEVICES
A leading
manufacturer of
graphics chips for
PCs which is also
betting hard on
VR tech.
EA GAMES
You know
you’re doing OK
when you can
afford Christiano
Ronaldo’s fee
for appearing
on the cover
of your latest
football game.
Ditto LeBron for
basketball and
so on.
SONY AND
MICROSOFT
Manufacturers of
the PlayStation
and XBox,
respectively,
because consoles
are swiftly
becoming 4K UHD
entertainment
hubs that have
expanded their
remit beyond
gaming and
into streaming
services like
Netflix. And for
the time being,
you’ll still need
dedicated
hardware.Gaming’s already
a $3bn industry
in Australia. Alone.
Go craze of 2016 – are literally adding
new dimensions to the business. Then,
there’s the growth of e-sports – live
competitive events in purpose-built
stadiums which are then streamed to
millions of viewers worldwide and where
every player (plus the majority of fans)
have to buy the software to be involved.
Finally, there’s mobile gaming, also
growing to such a degree that the likes of
Candy Crush advertisements now inform
primetime Australian television.
Ron Curry, CEO of Australia’s
Interactive Games and Entertainment
Association, says that gaming’s already
a $3bn industry in Australia. Alone.
“From an investment point of view,
people want to get on board this train
but they tend to only focus on the front
end – video gaming as we know it,” says
Curry. “But it’s the back end where
the future lies, as this technology is
becoming used beyond the boundaries
of just entertainment. For example, we
have Australian game makers working
with NASA for astronaut training and
Alzheimer’s Australia engaging game
makers to create virtual experiences
for carers to better understand the
illness. And all this knowledge and
intellectual property lies in the hands
of the gaming developers.”
Ubisoft’s creative director for Origins,
Jean Guesdon, is a boyish amalgam ofFROM LEFT: SONY
PL AYSTATION
EVENT AT THE E3
CONFERENCE IN LA;
UBISOFT'S ASSASIN'S
CREED: ORIGINS;
PLAYING EA SPORTS'
FIFA 18 ON NINTENDO
' S W I T C H '.PHOTOGRAPHY: GETTY IMAGES.