Competitor to DJ Hero planned for Fall release.

Former THQ studio bought by Curt Schilling's company, still developing Ken Rolston RPG

Didn't mention on earnings call; Had $40M in net cash after Apr-Q

360 sales up 28% YTD. 1B pieces of content downloaded on Live

Event:

DreamWorks Animation (DWA, Outperform) announced new details of its upcoming slate as well as cost reductions for its films beginning in 2010

Details:

DreamWorks announced that production costs beginning in 2010 will be 5% to 10% less than its previous "generic model” of $145M

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Event:

Ubisoft (UBI.FR, Outperform) reported full year results. It reported sales results and gave its F10 forecast on April 29th. Call @ 9:15 AM PST, 212-444-0181, code 6749225

Details:

F2009

• Reported: €1,058M / €0.87 (excluding items) and €0.71 (including items)
• Consensus: €1,064M / €0.84

• Note that the consensus for Ubisoft’s F09 ranges from €0.69 to €1.10. It does not compare accurately to these results because of a mix of French IFRS and U.S. GAAP as well as the treatment of one-time items
• It reported a 12.2% operating margin versus its guidance of 12% – so no surprises on an operating basis

F2010E

• Guidance: €1,100M and 11% OM
• PCS (E): €1,150M / €1.10
• Consensus: €1,152M / €0.86

• Confirms previous targets
• €95M Q1 sales, full year sales €1.1B, OI 11%+

Conclusion:

Neutral. No big surprises. Reiterated its F10 targets. F10 street estimates will likely be unchanged tomorrow

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• Ticker: TTWO
• Rating: Sector Perform
• Price: $8.83

Take-Two beats FQ2 estimates, but lowers forecast on game delays. TakeTwo reported upside to our fiscal Q2 (April) estimates. If not for lower taxes, EPS would have missed by $0.03. It lowered its sales forecast by $100 million on the high end of the range due to game delays, but was able to maintain its EPS targets, also due to lower taxes.

Repeated delays have become a huge issue. Take-Two delayed Red Dead Redemption and Mafia II. By our count, this completes the 12th major game delay since current management took over just over two years ago. Clearly management has no control over the release of its games, cannot accurately predict the timing of their completion or is not concerned with the forecasts it issues to investors. In any case, it has reinforced the low confidence we have in current management.

There are still much better ways to invest in videogames. In delaying more titles out of the year, Take-Two is now looking at an even more back-end-loaded year since most of its products will be released in fiscal Q4 (Oct.). We continue to lack confidence that the company can hit Street estimates. We believe there are better ways to invest that are not inextricably tied to a single franchise with a management team that has not established an investable track record.

U.S. PC Games 5/10-5/16 – Publisher (Avg. Price)

• WoW: Lich King – Activision Blizzard ($39)
• Sims 2: Double Deluxe – EA ($20)
• Empire: Total War – Sega ($33)
• WoW Battle Chest – Activision Blizzard ($35)
• Left 4 Dead – EA/Valve ($29)
• Spore – EA ($40)
• World of Warcraft – Activision Blizzard ($20)
• Fallout Trilogy – Bethesda ($20)
• Fallout 3 – Bethesda ($42)
• Sims 2: Apartment Life – EA ($20)

For commercial defamation and property loss; Cases heard June 18th and July 18th

Unclear if the government will issue a license to operate the game before resolved

Kaos' first game was Frontlines. Game to be shown at E3