The video game market is in serious trouble. Ahead of the acceleration in AI replacing game developers, the industry cut jobs in the last two years. Fears of a downtrend in video game firms worsened when Alphabet (GOOG) announced an AI that could create interactive game worlds.
Alphabet is on a winning streak. Its photo editor, Nano Banana Pro, might replace the more expensive creative software suite provided by Adobe Systems (ADBE). The subscription costs for Gemini are far cheaper than those of Adobe Firefly.
Google’s Project Genie takes text prompts and visual references (uploaded files) to create a game world. If the layman without any game development experience can make a game that easily, many firms face serious competition.
Roblox’s (RBLX) moat might shrink, although bears are not convinced. The short float is 2.65%.
Unity (U) lost around 45% in the last month, rewarding short-sellers. The short float is 5.96%.
Even China’s strong gaming firms pulled back. NetEase (NTES) and Tencent (TCEHY) dropped. Both firms are attractive holdings.
Nexon (NEXOY) is a stock that should outperform. Ark Raiders is a runaway success. Conversely, Ubisoft (UBSFY) faces an accelerated downturn. Past customers dislike its policies, along with its platform. That continues to hurt sales of its flagship game, Assassin’s Creed.
Other names in the gaming sector include Nintendo (NTDOY), Take-Two Interactive (TTWO), and AppLovin (APP).
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