Since MYZ was released on Nintendo Switch the Funcom stock has declined 7%. A bad port on the less technical competent Nintendo Switch is nothing unusual. But after our test of the game, we believe this is one of the worst examples when it comes to graphical resolution. The game looks like a 10-year-old game when it comes to resolution. We can read something similar on one of the leading game websites “Dualshockers”;
“By far the biggest hurdle that players will have to face with the Switch version of Mutant Year Zero is the visuals, which regardless of being played either handheld or docked are incredibly rough, to say the least. It’s clear that a number of technical compromises had to be made to bring the title to Switch..."
The Nintendo Switch port was delayed one month. When we look at the port, we realize it was not enough.
(UPDATED TEXT) A launch day update has been released for the Switch version of Mutant Year Zero that is aimed to address some of the known graphical/performance issues with the Switch release. A critic at the website "Critical Hit" think the day one update solves the most crutial graphical problems. We believe further updates will likely be released to optimize the port better, but this launch will certainly make sales suffer. We checked the Nintendo eShop top 20 best sellers (European territories) during the first days after launch and could not find the game on the list. Accorording to us this indicates a pretty bad sales start. The game is sold for USD 45 on Nintendo Switch, a high price point for a pretty old game with a pretty bad port according to us.
The DLC “Seed of Evil” have a Metascore of 70 which is fairly good. After analyzing the initial data from Steamspy it looks like sales are acceptable. According to the same source, Conan Unconquered has sold in line with our estimate of 26 000 copies sold in Q2.
Stocks in Funcom have declined around 20% since May. July 4 CEO Rui Casais bought 7000 stocks (average stock price NOK 14.44) which are unusual and of course a positive signal. (After the transaction Rui hold 47 000 stocks and 689 291 stock options in the company).
We have lowered our estimates somewhat, with worse than expected Nintendo Switch launch of MYZ. However, EBIT for 2019 is only lowered a bit, to USD 3 million (previous USD 3.4 million).
We will not make any changes in our fair value range or our base case in Funcom.
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