GameStop shares slide 6% premarket after Netflix makes first videogame hire signaling potential shakeup of sector

MW GameStop shares slide 6% premarket after Netflix makes first videogame hire signaling potential shakeup of sector

GameStop Corp. shares $(GME)$ slid about 6% in premarket trade Thursday, after Netflix Inc. $(NFLX)$ announced its first major videogame hire, potentially signaling a move beyond its streaming-video roots. The streaming giant hired Mike Verdu as vice president of game development, poaching him from Facebook Inc. (FB), where as vice president of content for Reality Labs, he oversaw Oculus Studios as well as the teams bringing second- and third-party virtual-reality games and other apps to Oculus virtual-reality headsets. Before that, Verdu was senior vice president of mobile for Electronic Arts Inc. $(EA)$, responsible for mobile game studios that operated franchises like "The Sims," "Plants vs. Zombies" and "Star Wars: Galaxy of Heroes." "Putting this together, it is clearly still early days and much of the detail remains to be clarified, but this feels like a significant event with broad ramifications across the video games landscape," Citigroup analyst Thomas A. Singlehurst wrote in a note. Singlehurst expects the move to accelerate the move of video games to cloud-based platforms, "and that this could bring with it the risk of disruption in the form of a shift in the monetization model for the traditional PC/console side of the market." Electronic Arts shares and Activision Blizzard $(ATVI)$ shares were slightly lower. Take-Two Interactive Software Inc. (TTWO) was down 0.2% and Sony was down 0.4%. Zynga Inc. $(ZNGA)$ was down 0.2%. Netflix shares jumped 2.4% and are up 1.3% in the year through Wednesday, while the S&P 500 has gained 16%.

-Ciara Linnane; 415-439-6400; AskNewswires@dowjones.com

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July 15, 2021 06:41 ET (10:41 GMT)

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