Loverboy’s hit song “Everybody’s Working for the Weekend” was right on the money. I believe that recreation, in addition to food and shelter, is one of the reasons that a majority of the U.S. population (including myself) spends approximately one-third of their lives working. Even with the dismal state of the economy, most individuals are willing to spend a significant amount of money on some sort of recreation for themselves and their families. For this reason, I believe that the entertainment/recreation industry is an industry that every investor should dedicate a portion of their portfolios to.
Activision Blizzard, Inc. (NASDAQ:ATVI) created some of the most successful gaming products that money can buy, including Call of Duty, World of Warcraft, Diablo, Starcraft, and Skylanders. These brands are among the highest quality and most popular gaming products available today.
Skylanders is a potential game-changer for Activision Blizzard, Inc. (NASDAQ:ATVI). In addition to releasing this very successful game for kids, Activision Blizzard has also had enormous success in Skylander toy sales, since toys are actually a part of the game. The Skylanders are a large number of characters with individual personalities that have varying capabilities, strengths, and weaknesses.
Activision Blizzard, Inc. (NASDAQ:ATVI) has been very successful in the massively multiplayer online role-playing game category (MMORPG). This gaming format allows players to interact and compete with one another online. In fact, they are in the process of developing a next generation version of MMO games and are working towards a release in 2016.
Activision Blizzard, Inc. (NASDAQ:ATVI)’s financial results have been excellent with sales over the last decade increasing from $948 million to $4.9 billion and earnings increasing from $74 million to $1.1 billion. Activision Blizzard initialized a dividend program in 2010 and has since increased its payout for three consecutive years.
Some investors believe that Activision Blizzard, Inc. (NASDAQ:ATVI) will be hurt severely by competition, such as free gaming products and The Walt Disney Company (NYSE:DIS) proposed release of a gaming product that will compete directly with Skylanders. However, I believe that Activision Blizzard is positioned to create the highest quality gaming products that will continue to attract a very large number of die-hard gamers.
The Walt Disney Company (NYSE:DIS) is an entertainment and media powerhouse that created and owns a large number of the world’s most popular animated character brands including Cinderella, Snow White, and Mickey Mouse. In addition, due to its acquisitions of Marvel Entertainment and Lucasfilm, Disney now owns a large number of additional intellectual properties such as X-Men, the Incredible Hulk, and an enormous number of Star Wars characters. Disney’s proposed release of a new gaming product called Disney Infinity will feature all of their characters and is designed to compete with Activision Blizzard’s Skylanders.
The Walt Disney Company (NYSE:DIS) Studios has released hundreds of very successful movies, beginning with their initial release of Snow White and the Seven Dwarfs in 1937. Recent successful releases include Brave, Wreck-It-Ralph, Tangled, The Avengers, Secretariat, and Cars. I believe that Disney’s success in the movie industry will continue and that the number of Disney blockbusters will accelerate in the upcoming years, especially after considering the numerous movie possibilities with Marvel and Star Wars.