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NEW YORK (AP) — Battered shares of Zynga Inc. showed some improvement on Wednesday after the "FarmVille" maker's fourth-quarter earnings surpassed muted expectations. Old-school video game maker Take-Two Interactive Software Inc., the maker of "Grand Theft Auto," also saw its stock rise after strong quarterly results.
GameStop Corp., meanwhile, fell nearly 7 percent after new rumors surfaced on the gaming blog Edge that the new Xbox won't play used games. GameStop, the world's largest video game retailer, relies on used games for some of its revenue so if the report is true, it would hurt its business.
Wedbush Securities analyst Michael Pachter said while it is possible that Microsoft could include some type of validation in the console that could limit used game sales, "they have no incentive to do so."
"If they do it alone, they would alienate gamers and Sony would gain share," he said in an email. "If Sony does it alone, the same thing happens. If they act in concert, there is arguably an antitrust suit in the making."
Microsoft Corp., the maker of the Xbox, declined to comment. It has not announced plans about the next version of the Xbox. Sony is expected to unveil the next PlayStation at an event in New York City later this month.
Shares of Grapevine, Texas-based GameStop dropped $1.82, or 6.8 percent, to $24.99 in midday trading. The stock has traded in a 52-week range of $15.32 to $28.35.
Zynga, meanwhile, added 27 cents, or 9.7 percent, to $3.01. The San Francisco-based online game maker reported a smaller loss and flat revenue that nonetheless exceeded analysts' expectations. The company also indicated that it's doubling down on mobile games. Zynga's games are mostly played on Facebook's web site, but Facebook's users are mostly checking in to the social network on smartphones and tablet computers.
After a promising initial public offering in December 2011, Zynga's stock lost 75 percent of its value in 2012 as demand for its games faded. It's up about 29 percent year-to-date compared with 6 percent gain for the Standard & Poor's 500 index.
Shares of Take-Two jumped $1.51, or 11.9 percent, to $14.17, closer to the high end of its 52-week trading range of $7.37 and $16.35. The New York-based company said strong sales of "NBA 2K3" and "Borderlands 2" helped push the quarter's results ahead of expectations. Investors dismissed guidance that fell short of estimates for the current quarter. That's because Take-Two is launching the next installment of its biggest game, "Grand Theft Auto," in September.