Playside Studios Ltd (ASX: PLY) is about to launch its much-anticipated new game, Mouse: P.I. For Hire, with the analyst team at Shaw and Partners convinced the company's shares are undervalued in the lead up to the release.
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Momentum building
The company released an update about the game today, saying that the number of people who had put the game on their wish list had increased from 1.4 million to 1.5 million across all platforms.
The company added:
Recent marketing initiatives have driven tens of millions of organic views across owned social channels and secured significant global media coverage in the last two weeks, including favourable reviews of a demo build of the game. Wish listing activity for the week ending 7 April increased by 60% week on-week, indicating strong organic momentum heading into launch.
The company is scheduled to release the game digitally on April 16, across PC, PlayStation 5, Xbox, and Nintendo Switch 2, priced at US$29.99 or US$39.99 for the digital deluxe edition.
The company said, following the launch, it would provide formal FY26 guidance within 30 days and expected FY26 revenue to exceed FY25, with a reduction in operating costs.
Good early reviews crucial
The Shaw team has analysed the digital gaming market and said that, based on the 213 games released on the Steam platform since 2013 and which have generated more than US$10 million in revenue, positive review scores were critical.
They added:
We have specifically analysed 36 games that have generated between US$20-100m gross revenue on Steam, and had a wish list ranking among the Top 25 unreleased titles on Steam prior to launch. Key takes: 1) Reviews is the key metric. More reviews = more revenue; 2) The first 90 days is key, as about 60% of max reviews are captured in that period.
Shaw said that Gamediscoverco data showed that Mouse: P.I. For Hire currently had 62,278 followers, and was the 16th most wish listed unreleased title on Steam.
They added:
Assuming follower conversion rates and revenue per 90-day review metrics consistent with our US$20-50m sample, supports a circa US$30m estimate of gross revenue for MOUSE on Steam. Note: this is Steam revenue only and excludes sales on other platforms like Nintendo etc. If MOUSE can achieve follower conversion rates and revenue per 90-day review metrics consistent with our US$50-100m sample, then we see potential for about US$45m of gross revenue on Steam alone. We see a unique opportunity in Playside, where it has invested substantially in its original IP portfolio over the last 18 months (about $35m), and follower/wish list data for MOUSE, the first major title, suggests it will be a material revenue generator and that catalyst is just weeks away.
Shares looking cheap
Shaw and Partners has a buy rating on Playside shares and a price target of 44 cents, compared with the current price of 27 cents.
The ASX tech company was valued at $119.6 million at Wednesday's close.
