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Gaming Stocks Alert: Why Are ATVI, RBLX, EA, TTWO Stocks Leveling Up Today?

Gamers are likely celebrating today after major news from two big names in the industry. Today, Microsoft (NASDAQ:MSFT) announced plans to acquire video game titan, Activision Blizzard (NASDAQ:ATVI). The record $68.7 billion acquisition has spurred an industry-wide uptick for gaming stocks, as a number of big names are trending up. The big winner, expectedly, is ATVI stock, which is up more than 25% on the purchase.

A person playing mobile games and PC games at the same time.
Source: Dean Drobot/Shutterstock.com

What do you need to know about today’s video game stock power-up?

Microsoft’s latest buy marks the largest purchase ever for the company behind Xbox and Windows. The takeover isn’t without precedent, however. With the metaverse trend quickly gaining momentum, many look to video games as a major beacon for the concept. The deal would make Microsoft the third-largest gaming company by revenue, only trailing Tencent (OTCMKTS:TCEHY) and Sony (NYSE:SONY).

Activision publishes some of the biggest games in the industry with hits like Call of Duty, Minecraft, World of Warcraft and more. Activision itself consists of several major subsidiaries, largely in the form of game developers. Sitting atop the throne (no pun intended) is Candy Crush-maker King Digital, which reported $404 million in operating income this year.

Despite its successes, Activision isn’t without controversy. Just this week, the company announced firing nearly 40 employees, with another 44 employees since July receiving written warnings, stemming from sexual harassment and other misconduct allegations. In the summer, Activision allegedly collected roughly 700 reports of misconduct in response to a lawsuit against the company.

Activision stock has performed poorly amid the controversy, shedding 37% of its share price since its all-time high last year. But no longer. Today’s gains nearly make up for the downtrodden several months.

Gaming Stocks See Uneven Gains on the News As Microsoft Stumbles

On an otherwise dreary day for the markets, a number of gaming stocks are seeing clear skies. Activision rival, Electronic Arts (NASDAQ:EA), is up more than 4% today on the news. Additionally, game developer Take-Two (NASDAQ:TTWO) has seen a nearly 2% gain so far. However, it’s not exactly a uniform increase across the sector; Roblox (NYSE:RBLX) is down nearly 2% on the day.

Surprisingly, today’s acquisition did little to lift Microsoft itself. MSFT stock is down 1.92% so far despite generally positive reactions to the deal.

Despite the indifferent stock reception, Microsoft Chief Executive Phil Spencer feels confident in the decision. In a blog post this morning, Spencer had some glowing words for the new consolidation.

Over many decades, the studios and teams that make up Activision Blizzard have earned vast wellsprings of joy and respect from billions of people all over the world. We are incredibly excited to have the chance to work with the amazing, talented, dedicated people across Activision Publishing. … The fantastic franchises across Activision Blizzard will also accelerate our plans for Cloud Gaming, allowing more people in more places around the world to participate in the Xbox community using phones, tablets, laptops and other devices you already own.”

From a number of angles, the deal seems promising, at the very least for gamers excited to see what the new partnership will bring.

On the date of publication, Shrey Dua did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Article printed from InvestorPlace Media, https://investorplace.com/2022/01/gaming-stocks-alert-why-are-atvi-rblx-ea-ttwo-stocks-leveling-up-today/.

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