Success of Transformers: Earth Wars Leads Investor Interest In Hasbro
RAC - Friday, June 02, 2017
On the website Seeking Alpha, analyst Motek Moyen has made a case that the success of Transformers: Earth Wars, along with its developer Space Ape Games' recent purchase by Clash of Clans mobile gaming giant Supercell, has poised Hasbro to make massive gains in the Chinese mobile market and thus increase the value of their stock significantly. Keep reading for more info!
Moyen has some interesting numbers: Earth Wars is the largest earner for Space Ape, generating the majority of the $92 Million the company made last year. That apparently got the interest of Supercell, who now own 62% of Space Ape.
Here's where we add another company name and things get complex: Supercell - now majority holder of Space Ape - is itself by Tencent - and it's on this recommendation that Moyen is staking his recommendation. Tencent is the operator of one of the mobile app store in China, MyApp. And Transformers is huge in China. And Tencent owns Supercell owns (most of) Space Ape, who have a very successful and well-received mobile "Freemium" (AKA "Free-to-Play") Transformers game. With these connections, Moyen believes that an expansion of Transformers, if not Earth Wars itself, is a natural thing. Beyond which, with revenue from Clash of Clans on the wane, Tencent may wish to promote its newly-acquired Earth Wars game to its broader Clash user base.
There's no evidence that this happening (yet), but it looks like a setup where a group of successful companies could well help each other to a greater success. All told, it's an interesting read and a fascinating look at the behind-the-scenes investor world that drives companies like Hasbro.
As of the posting of the Seeking Alpha article, Hasbro stock was trading for $105.92 per share. Mobile Gaming currently makes up a plurality (that is, the largest share but not a majority) of the gaming market at 42% of all gaming revenue. Browser-based games make up 27%, and console gaming 31%.