Treasure Chest: Playside Studios’ Mouse Release

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This story features PLAYSIDE STUDIOS LIMITED, and other companies.
For more info SHARE ANALYSIS: PLY

FNArena's Treasure Chest reports on money making ideas from stockbrokers and other experts. Today's idea is Playside Studios with the pending launch of Mouse P.I. for Hire, a potential revenue game changer.

By Danielle Ecuyer

FNArena’s Treasure Chest reports on money making ideas from stockbrokers and other experts.

Whose Idea Is It?

Shaw and Partners

The subject:

Playside Studios ((PLY)).

Investors shunned Playside Studios’ inline interim results, giving the stock a thumbs down for delaying the launch of its original game, Mouse P.I. for Hire to April from March.

With the launch date fast approaching, Shaw and Partners posits historical analysis is pointing to an upcoming robust gross revenue generator for the company.

More info:

Playside Studios describes itself as “Australia’s leading video game developer and publisher” .

At the end of February the company delivered what Canaccord Genuity detailed as an in-line 1H26 result, though marred by the “unexpected delay” of Mouse P.I. to April 16 from March 19.

Several factors were in play (pun intended) at the time for the publishing delay, including the March 19 release of two keenly awaited titles, the start of the 2026 Steam Spring Sale and a further month to tweak out any potential “bugs” to be resolved.

With April 16 (US time) fast approaching, Shaw and Partners tipped their hat towards the pending positive catalyst for Playside, noting management has invested circa -$35m in its original Intellectual Property (IP) portfolio over the past 18 months, with Mouse P.I. for Hire considered the first “material revenue generator” for the company.

To gauge the potential success of Mouse, the analyst has drawn upon historical trends of 36 games on Steam (a global digital platform of online games) which have produced over US$10m in revenue.

The analysis revealed review count as the most reliable statistical metric (R-squared at 0.7 for the statistically minded) to estimate post-sales revenue.

Review scores also are important, with most games generating over US$10m enjoying positive reviews.

The 36 games assessed produced gross revenue on Steam between US$20m-US$100m and ranked into the Top 25 wish-list of unreleased games on Steam before launch.

Reviews were the number one factor in predicating potential success. Put simply by Shaw, “more reviews equals more revenue”.

Secondly, the first 90 days is the key indicator, as around 60% of max reviews are captured over that period. How reviews evolve in the 90 days is what determines “good and great games”.

Games that go on to generate US$50m-US$100m have historically trended more slowly at the start to convert from followers/wish-list.

Around 60% of max reviews are in the first 90 days, compared to circa 50% of gross revenue. The analyst believes investors can gather insightful trends by watching reviews early and applying that to estimate future sales growth.

Data analytics and research service for the video game industry, Gamediscoverco, points to 62,278 followers for Mouse P.I. for Hire, making it the sixteenth most wish-listed unreleased title on Steam.

Applying historical data trends for conversion rates and revenue per 90-day review metrics, Shaw estimates around US$30m of gross revenue for Mouse on Steam.

Importantly, this reflects only gross sales revenue from Steam (excluding downloadable content) and excludes other platforms for content distribution such as Nintendo.

There is an estimated upside potential of around US$45m of gross revenue on Steam, which is some 50% upside to sales.

While Shaw focused on the release of Mouse P.I., the Canaccord analyst at the interim results emphasised Playside has the “strongest slate of upcoming” original IP titles in its history.

The Dumb Ways to Party console title is expected in 2H2026 (1H27 fiscal year) and Game of Thrones: War for Westeros is flagged for release in the next 12 months, followed by a second Game of Thrones title.

While the share price has recovered partially from its post interim result disappointment (fell -9% on the day), Canaccord pointed to the improved lower cost base and stronger balance sheet.

Pro forma cash of around $20m is seen as placing the company in a better position to capitalise on the robust pipeline of what is viewed as “high quality original IP titles” due to be released over the forthcoming 12 months.

Are higher fuel and energy costs likely to impact on the gaming sector?

Investors, rightly, might be concerned about the impact of higher fuel and energy costs on players’ disposable income.

Jarden noted recently, post analysis of 22 years of monthly Nevada sub-market gross gaming revenue data, there was no significant link between oil prices and gross gaming revenue, even with a lag.

Consumer confidence was isolated as the most important macro leading indicator in terms of the strength of impact and came in at “just circa 3%” of gross gaming revenue changes.

Notably, gross gaming revenue advanced during 2004-08, when the oil price tripled, and also remained durable during the start of the Russian incursion into Ukraine in 2022. The GFC, excluding the covid period, was observed as a period when gross gaming revenue was impacted.

Macquarie explained at the end of March US trackable casino gaming revenues, based on 26 jurisdictions, revealed 3% growth y/y in February at over US$1.4bn and over the last 12 months US casino gaming revenues remained “resilient”.

Based on longer-term analysis, the Macquarie analyst views US gaming can stand up against a weakening consumer environment.

UBS’ analysis of Australian gaming in March indicated Aristocrat Leisure’s ((ALL)) portfolio remained robust, with Spooky Link remaining number one in the market and Dragon Link continuing to add units.

Aristocrat’s portfolio retained five of the Top 10 Premium leased and WAP (wide area progressive) games.

Light & Wonder’s ((LNW)) share of top premium leased and WAP games remained at 47%, with a robust pipeline including Dancing Drums, Ultimate Fire Link and Huff N Puff.

UBS is Buy rated on both Aristocrat and Light & Wonder with $69 and $215 target prices, respectively. Jarden is also Buy rated on both gaming companies with a $68 and $199 target, respectively.

Macquarie retains an Outperform on both stocks with $63 and $205 target prices, respectively.

Shaw and Partners emphasises the positive catalyst for the Mouse P.I. launch with a Buy rating, ascribed High risk, alongside a 44c target price.

Canaccord Genuity is also Buy rated with a 60c target price.

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