Activision BlizzardElectronic ArtsTake Two Interactive Software
Video Game Publishers (ATVI, EA, TTWO): Will margins compress in a Fortnite?September 19, 2019
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Will margins compress in a Fortnite? Video game publishers have been on a tear in recent years, driven by strong market fundamentals. However, companies such as Activision Blizzard, Electronic Arts, and Take-Two Interactive Software have seen their ESG scores fall over 20% YoY, driven by labor issues. In this brief, we discuss the following:
- The concept of ‘overearning’
- Labor issues within the video game industry and fundamental downside scenarios for ATVI, EA, and TTWO
- Understanding the combination of valuation and real-time ESG performance as a unique signal for identifying risk