Video Games: US packaged software sales fell 3% in September (vs. our +4.5%e)

On Thursday overnight, the NPD Group released data for October’s packaged video games sales in the US. Hardware sales were flat Y/Y (the Xbox One was the top-selling console for the 2nd time YTD) and packaged software down 3% vs. our +4.5%e, mainly because of the strong decline in handheld games. Microsoft’s Halo 5: Guardians was the best-selling game. At first sight, we expect growth for packaged software in Q4. Ratings maintained in our sector coverage: Buy ratings on UBISOFT with a FV of EUR37 (Vivendi’s recent move now encourages investors to look beyond the current fiscal year) and on GAMELOFT with a FV of EUR6.7 (investors now finally look at next year’s multiples to play a margin recovery story). The sector is now entering its crucial period (calendar Q4 is ~ 50% of FY sales).