Source: Activision Blizzard.
In addition to developing its Skylanders franchise, Activision Blizzard, Inc. (NASDAQ:ATVI) plans on releasing Hearthstone: Heroes of Warcraft, a cross-platform, free-to-play, digital, collectible card game for PC, Mac and iPad, in late 2013. With a 98% increase in net revenue generated by PC ($93 million in Q1 2013, $47 million in Q1 2012) according to its quarterly report, Activision Blizzard is expressing its continued desire to dominate the PC gaming experience.
Furthermore, Activision Blizzard, Inc. (NASDAQ:ATVI) is exhibiting its desire toward growth and video game progression. With the expected release of Call of Duty: Ghosts on November 5, and Diablo III in September on Playstation 3 and Xbox360 — with plans for a PlayStation 4 release later –this company clearly has its sights on the future.
A few areas of concern for Activision Blizzard reside in the transition between gaming systems, the development of Call of Duty, and the increasing competition from Electronic Arts Inc. (NASDAQ:EA) and The Walt Disney Company (NYSE:DIS). Sales of CoD: Ghosts are not expected to be as high as its predecessor due to the transition between systems, from PS3 and Xbox 360 to PS4 and Xbox one, respectively. After E3 in early June, critics claimed that CoD: Ghosts doesn’t demonstrate nearly enough advances in the game interface, and could suffer the effects of competing with EA’s Battlefield 4, whose predecessor, Battlefield 3, rivaled CoD: Modern Warfare 3 in 2011. However, Modern Warfare 3 has outsold Battlefield 3 nearly 2-to-1, according to VGChartz. VGChartz also showed that Battlefield 4 presale has outsold CoD: Ghosts presale by about 40,000 units as of June 29. Although this appears slightly daunting to the future of CoD, this sales differential can be partially attributed to the CoD faithful who are still exploring new maps in CoD: Black Ops II and haven’t decided to preorder the newest release in the series. Although Battlefield may present viable competition, based off the sales of the prior releases in the series, it’s safe to say that CoD will continue to control the market.
Disney has developed its very own knock-off of Skylanders that the company plans on releasing in August 2013. Disney Infinity, the rival product, uses physical toys that are then synthesized with the game, similar to Skylanders. The difference between the two, which could affect Skylanders, is that Disney Infinity uses characters from Disney and Pixar movies. This allows the gamer to interact with familiar characters from their favorite movies. A Disney Infinity Starter Pack is listed on gamestop.com for $74.99, the same price as a Skylanders: SWAP Force Starter Pack, clearly a pricing strategy by Disney. The area that investors should be watching this summer — which positively affects Disney Infinity and, consequently, negatively affects Skylanders — is the box office. Disney Infinity‘s potential only increases with the success of Monsters University, which features one of the platform characters of Disney Infinity, Sully. While Disney Infinity shows great potential, the billion-dollar industry that is Skylanders may have already captured too much market share for Disney to have a significant impact. Only time will tell.
Although Disney and Electronic Arts present areas of concern for Activision Blizzard, Inc. (NASDAQ:ATVI), due to its solid foundation, expansive fan base of lifelong gamers, and growth and expansion plans, this company is one that I see growing and prospering in the subsequent years. Activision’s multiplatform business model makes for a company that is dependable and one that I, and Motley Fool One analyst Jason Moser, believe in. Just as my gaming will continue to grow in the subsequent years, so will Activision Blizzard’s dominance of the market.
The article Why Activision Blizzard Is in a Realm of Its Own originally appeared on Fool.com.
Fool intern Timothy Boyle has no position in any stocks mentioned. The Motley Fool recommends Activision Blizzard, McDonald’s, and Walt Disney (NYSE:DIS). The Motley Fool owns shares of Activision Blizzard, McDonald’s, and Walt Disney.
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