October 7, 2020

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Nintendo shares could grow on innovation, sports betting helps gambling industry rebound, ICON is the latest fitness company to step into funding stream, and World Series tickets sell out fast.

Nintendo Innovates

Nintendo

As Nintendo looks to continue evolving its Switch console, some analysts think the company’s stock could be ready to boom. Shares are approaching an all-time high and are up 30% year-to-date — but Nintendo’s innovation efforts could push it higher.

Rather than risk new platform development that can lead to boom or bust console cycles, analysts believe new versions of the Switch could be the way forward — think Apple’s iPhone strategy. First up: an augmented reality game with a real-life remote controlled Mario Kart to compete with new Sony and Microsoft consoles this holiday season.

Nintendo’s Big Year:

  • Hardware sales were up 166% in its April-June quarter.
  • Software sales were up 123% in the quarter.
  • Total revenue was $3.39 billion, with a $1.37 billion operating profit.
  • New “upgraded Switch console” expected in 2021.
  • Animal Crossing: New Horizons has sold more than 22.4 million units since it was released in March.

Sports Betting Success

Ron Chenoy-USA TODAY Sports

August was the fourth straight month of the U.S. gaming industry’s recovery — which includes casino, sports betting and online gaming revenue. Nationwide revenue from the segments were up 5.6% compared to July, but down 19.8% year-over-year, according to the American Gaming Association.

At the heart of the recovery was the largest sports betting month ever, with Americans wagering $2.1 billion. The record handle generated $119.4 million in revenue, the second-highest grossing month on record. 

Sports betting and online gaming — a big growth point for companies like DraftKings and Penn National — are helping buoy slots and table gaming slides. Gross gaming revenues from sports betting and online gaming are up 31.5% and 203.3% on the year, respectively.

Sportsbook Awareness Level in U.S. via CivicScience:

  • DraftKings — 41%
  • FanDuel — 38%
  • Barstool — 27%
  • FoxBet — 25%
  • BetRivers — 22%
  • PointsBet — 22%

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ICON Raises $200M

NordicTrack

ICON Health & Fitness is the latest recipient of the flood of cash hitting the at-home and connected fitness industry. The owner of NordicTrack, ProForm and Freemotion raised $200 million in its latest funding round. 

Early Peloton investor L Catterton led the round, with reports suggesting the firm doesn’t view the two companies as competitors. ICON also owns streaming fitness platform iFit, which connects to bikes and treadmills made by the manufacturers.

With approximately 700,000 paid subscribers, iFit also raised $200 million on its own in 2019. Valued at more than $7 billion, ICON could go public within the next year.

Staying In & Staying Fit:

  • The home fitness equipment market is projected to reach $4.3 billion by 2021.
  • Peloton fourth-quarter sales reached $607.1 million, up 172% year-over-year. 
  • In September, fitness platforms Zwift and Tonal raised $450 million and $110 million, respectively. 
  • Fitness social network Strava recently announced it’s seeking investors at a $1 billion valuation.

Fan Plans

Tim Heitman-USA TODAY Sports

Sporting events are a hot ticket these days, with seats for each World Series game selling out in approximately 90 minutes yesterday. Tickets were sold in four-seat “pods” as a social distancing measure to safely fit 11,550 fans — the World Series will fill up about 29% of Globe Life Field in Arlington, Texas.

While MLB is entering its postseason bubble and preparing to welcome fans for the first time this season, NFL teams are still split on fan policies. Yesterday, the Green Bay Packers announced an indefinite hold on hosting fans at Lambeau Field because of increasing COVID-19 cases across Wisconsin.

Packers’ faithful will have to enjoy games at home, but the Dallas Cowboys continue to break records for NFL game attendance amid the pandemic. More than 25,000 fans were present in AT&T Stadium for the Cowboys’ Week 4 matchup.

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Latest On FOS

Latest On FOS

Previously just a physical attraction to fans, MLB teams are beginning to experiment with digital bobbleheads. The Mets and Rays have launched digital bobbleheads in recent weeks.

Production company Religion of Sports, founded by Tom Brady, Michael Strahan and Gotham Chopra, has a new deal with Public Radio Exchange to move into the podcasting space. Known for its sports documentaries, the company is going to launch a slate of shows in 2021. 

Nutrition companies are beginning to eschew traditional sports partnerships to reach the everyday consumer in a more accessible way, like video games. Ghost recently entered a two-year deal with esports organization XSET to be its exclusive partner for protein, gaming and performance supplements, and ready-to-drink beverages.

Question of the Day

Do you own a Nintendo Switch or Switch Lite?

 Yes   No 

Tuesday’s Answer

53% of respondents would or already have invested in DraftKings.

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