Video game companies have branched out of their consoles and are taking their intellectual properties to the big screen and beyond. In this episode of “The Gaming Show” on Motley Fool Live, recorded on March 21, Fool.com contributors Jose Najarro and Jon Quast discuss what’s next on the horizon for video game stocks.
Jose Najarro: I think it’s pretty interesting here in the gaming market, where most people believe the only way these gaming companies can really make money is through selling games. But I think we’re seeing a little bit different nowadays, where if you have a strong IP, you also have the ability to branch out of games. For example, one of the most recent thoughts has been Halo. Halo is now moving into Paramount+, where they are going to have a streaming service. Obviously for Microsoft, it’s not a game changer, it’s not. But there’s obviously smaller companies that might have something more. For example, Netflix is releasing a Tekken anime series this year. Tekken is created by Bandai Namco Studios, the big Japanese studio. But Netflix is now creating anime series for their originals. This is not the first time Netflix has done this. They have The Witcher series. The Witcher is doing amazing. I believe now it’s gone into a third season. It’s earned third season spot and a second anime movie. Netflix has also worked with League of Legends to create an animated series. I think an important takeaway for this is for investors looking into the gaming market, it’s no longer just from the gaming perspective. These gaming, with that strong IP, they’re able to hit different markets like the big screen. Fortnite just released their new season or their new book, I forget how they do it. It’s going to introduce Doctor Strange, and Doctor Strange movie is coming out, I believe in April or May, I forget which month. But you can see how these gaming companies are using, or vice versa, how even companies, like Disney, who are focused on animations or movies are bringing them over to the gaming side. I think that’s something that gaming investors should be excited, that there’s another form of revenue aspects these companies can grab in the future.
Jon Quast: When you think about it, these are properties that, because they have already been released to the big screen, they already have been watched by millions of people, they already have that brand awareness, if you want to call it that. The games sell themselves at that point because it’s not like you have to tell people what Doctor Strange is or what Halo is. They already know. They’re very familiar, and they love the intellectual property. So making that jump into the gaming world, as far as efficiency goes, it’s a very efficient way to bring a game to market.