The video-game space is currently abuzz with excitement surrounding this year’s Electronic Entertainment Expo (E3), which kicks off on Jun 13 in Los Angeles. Apart from E3, another big story this past week was Sony Corp selling over 1 million units of Playstation VR Headset.

Recap of the Developments

1. Hosted by Entertainment Software Association (ESA), E3 is an annual video-game industry trade show. E3 2017, a three-day event will officially kick off on Jun 13 at the Los Angeles Convention Center. However, numerous press conferences are lined up prior to the E3, starting with Electronic Arts’ (EA Quick QuoteEA - Free Report) press conference on Jun 10, 2017. It will be the first time in Expo’s 24-year history that the general public will be allowed to attend the fair. Reportedly, over 15K tickets have been sold out so far.

Some of the anticipated announcements at this year’s E3 could include Microsoft’s (MSFT Quick QuoteMSFT - Free Report)  new hardware (nicknamed Project Scorpio), which is the company’s new upgraded Xbox One console after last year’s offering, Xbox One S. Per media reports, the company could demonstrate the console along with a few new games like a new Halo/ Forza title. We might also get details like price and release date at the E3.

Nintendo (NTDOY Quick QuoteNTDOY - Free Report)  is expected to display new games for its Switch Console, like Super Mario Odyssey, along with a new Pokémon title. Released in March 2017, Switch has had a spectacular start despite a non-traditional release date. The console, priced at $300, combines the functionalities of both conventional consoles and handheld devices. Switch is designed to attract casual gamers who are increasingly using mobile. Nintendo, after staying away from mobile gaming for long, has finally become highly focused on the same. Last year’s smash hit Pokémon Go gave it the much-needed impetus.

Sony Corp might apparently announce pricing changes for PS4. The company is known for making blockbuster presentation at the expo and this year will be no different, adds media reports. We expect some announcement regarding its virtual reality (VR) efforts. Reportedly, a new Spiderman game along with demos of rebooted games, Days Are Gone and God of War, are likely to be unveiled at the expo.

Activision Blizzard will be showcasing the gameplay of its much anticipated Call of Duty: WWII and Destiny 2. It will also display a new Crash Bandicoot N. Sane Trilogy game. Electronic Arts is likely to introduce the hotly anticipated sequel to Star Wars Battlefront. Released in 2015, Star Wars Battlefront turned out to be a blockbuster success with over 14 million copies sold. The success was also attributed to super success of Star Wars: The Force Awakens, the first Star Wars’ movie in a decade, which released around the same time as the game. We expect similar response to the Battlefront sequel this year, which releases around the same time as next instalment of Star Wars, The Last Jedi. 

Other important games that might premiere at the Expo include Take Two Interactive’s (TTWO Quick QuoteTTWO - Free Report) Red Dead Redemption 2, Ubisoft’s Assassin’s Creed: Origins and Far Cry 5.

2. Chinese online media company, SINA Corp announced details of its Weibo share-distribution plan. In September last year, the company had said it will distribute Weibo shares to SINA shareholders on a pro-rata basis. As per media reports, the move is aimed at tackling overvaluation of Weibo shares and closing the valuation gap for SINA shareholders. 

SINA will be giving away one Weibo Class A ordinary share to shareholders holding 10 shares of the company.The shares are distributable on Jul 10, 2017. Originally, SINA had a majority stake (54% or 78% by voting power) in Weibo, which is a microblogging service available in China. Share distributions (including the abovementioned) will reduce SINA’s stake in Weibo to 46% or 72% by voting power.

Currently, SINA carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

We note that SINA’s shares have gained 68.94% in the past one year, vastly outperforming the Zacks categorized Internet-Content industry, which gained 39.54% during the period.

3.  Sony has sold over 1 million Playstation VR headsets. Released in October, these headsets are priced at $399 and are relatively cheaper compared with other headsets available in the market. Also, PS VR has an advantage over both Oculus Rift and HTC’s Vive, which need high-end PC configuration to work while PS VR is compatible with Sony’s gaming console PS4. Atsushi Morita, president of Sony Interactive Entertainment Japan Asia, was quoted by CNBC saying "I believe that VR technology is the (greatest) innovation since the birth of television. VR allows you to travel to World Heritage sites or to space while staying at home. It's like a time machine or a door to anywhere."

Currently, Sony carries a Zacks Rank #2 (Buy). In past one year, shares of Sony have gained 31.7% better than the Zacks categorized Audio/Video Home Products industry’s average gain of 26.09%.

4. Following the release of the new TLLBB mobile game by Sohu.com Inc’s (SOHU Quick QuoteSOHU - Free Report) subsidiary, Changyou.com Ltd , the company has updated its second-quarter 2017 outlook.

For second-quarter of 2017, Sohu now expects revenues in a range of $420–$450 million as against $390–$420 million projected earlier.

Online game revenues are expected in the band of $110–$120 million, up from $75–$85 million projected earlier. The company expects non-GAAP loss per share between $1.21 and $1.47 compared with $1.80 and $2.05 projected earlier.

Meanwhile, Changyou expects revenues in a range of $140–$150 million compared with $110–$120 million range projected earlier.

At present, Sohu.com carries a Zacks Rank #3.We also note that Sohu’s shares lost 17.41% in the past one year, vastly underperforming the Zacks categorized Internet Software industry, which gained 24.32%.

Performance

The following table shows the price movement of the major video game companies over the past five trading days as well as the last six months:

Over the last five trading sessions, NetEase Inc (NTES Quick QuoteNTES - Free Report) was up 7.28%, while Glu Mobile Inc was up a mere 0.55%.

In the last six-month period, Activision Blizzard surged the most (61.94%). Activision has been benefiting from its focus on broadening its franchise portfolio, innovation and initiatives to expand to new geographies. Its offerings like StarCraft, World of Warcraft, Heroes of the Storm and Call of Duty are widely popular and should continue to contribute to the bottom line.

Activision is aggressively working on becoming a media entertainment giant, somewhere on the lines of The Walt Disney Company. Apart from launching a movie studio and strengthening its presence in the lucrative e-sports market, it also introduced a new consumer product division recently. It is to be spearheaded by an ex-Walt Disney executive, Tim Kiplin. 

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