Ghosts & Goblins: Should Other Game Publishers Fear Activision?

Activision continues a busy year with Call of Duty: Ghosts and Blizzcon in the same week.

It’s been an eventful year for Activision Blizzard, Inc. (NASDAQ:ATVI). After recently repurchasing a controlling share in themselves from Vivendi Universal, the company continued its momentum with the release of the highly anticipated Call of Duty: Ghosts and hosting the return of the always eventful Blizzcon fan convention.

Activision Blizzard, Inc. (NASDAQ:ATVI)

Click the interactive chart below to see the stock price of Activision over time.

Frat houses everywhere held their breath for the November 5 release of Call of Duty: Ghosts. The tenth version of the perennial FPS blockbuster will be the first released on the upcoming PlayStation 4 (SNE) and Xbox One (MSFT)consoles, in addition to the current generation.

Despite middling critical reviews the game is already off to a strong start, shipping $1 billion in sales to retailers. However actual sales currently trail the $500 million previous installment Black Ops 2 sold on its launch date, and far short of the record-breaking $800 million reached by Rockstar’s (TTWO) Grand Theft Auto V.

It is very likely however that many gamers are holding off on purchasing the game until the launch of the next console generation, which could ultimately result in another burst of sales heading into the holiday season.

On the nerdier side, this month also marked the return of Blizzcon, a weekend celebration of all things related to Activision subsidiary Blizzard Entertainment. Devotees of the WarcraftStarcraft, and Diablo franchises got to show off their creativity in fan contests, attend panels and concerts, and preview upcoming games as well as the long-rumored World of Warcraft movie.

Blizzcon may prove to be a shot in the arm for the ailing publisher. Activision’s flagship MMORPG World of Warcraft – which once proudly advertised over 10 million players – lost 700,000 subscribers over the past three months. This brings it down to 7.7 million active subscribers, and represents a 54% drop in revenue over the past seven months.

This drop may be attributed to general player fatigue as well as a general industry movement away from the subscription-based MMO model. Blizzard hopes to remedy this with the announcement of the Warlords of Draenor expansion, which will aim to lure back lapsed veterans as well as provide a more engrossing experience for new players.

Blizzard additionally announced two forays into the free-to-play market based on the Warcraft franchise. Its digital CCG Hearthstone is slated to enter open beta soon, and has already had a positive reception amongst early testers.Hearthstone will be released for the PC and Mac (AAPL) operating systems as well as Android (GOOG) and iOS systems.

Gamers also had a hands-on opportunity to play Blizzard’s long-awaited free-to-play MOBA Heroes of the Storm. Heroes of the Storm will take on the massively popular League of Legends and former Warcraft modification-gone-rogue DOTA 2 in this highly popular team-based strategy genre. Also on display was Reaper of Souls, an upcoming expansion pack for the Diablo III RPG that will be released for PC, Apple OS, and PlayStation platforms.

With a new console generation rapidly approaching, Activision is doing everything it can to maintain its fervent player base with new improvements and products. As some of its most recognizable franchises struggle to achieve the same success as their predecessors, will it be enough to ward off the growing competition?

Click on the interactive chart below to see the yearly return of Activision and its competitors over time.

Do you think Activision’s busy year indicates future potential? Use the list below as a starting point to your own analysis.

1. Activision Blizzard, Inc. (ATVIEarningsAnalystsFinancials): Activision Blizzard, Inc. publishes online, personal computer (PC), console, handheld, and mobile games of interactive entertainment worldwide. Market cap at $19.0B, most recent closing price at $16.99.

2. Take-Two Interactive Software, Inc. (TTWOEarningsAnalystsFinancials): Develops, and distributes interactive entertainment software, hardware, and accessories worldwide. Market cap at $1.7B, most recent closing price at $17.95.

3. Google Inc (GOOGEarningsAnalystsFinancials): Google is the world’s most popular search engine. Market cap at $337.7B, most recent closing price at $1010.25.
4. Sony Corporation (ADR) (SNEEarningsAnalystsFinancials): Designs, develops, manufactures, and sells electronic equipment, instruments, and devices for consumer, professional, and industrial markets worldwide. Market cap at $16.8B, most recent closing price at $16.61.

5. Microsoft Corporation (MSFTEarningsAnalystsFinancials): Develops, licenses, and supports a range of software products and services for various computing devices worldwide. Market cap at $313.1B, most recent closing price at $37.59.
6. Apple Inc. (AAPLEarningsAnalystsFinancials): Designs, manufactures, and markets PCs, mobile and media devices, and sells related software, services, and third-party digital content and applications worldwide. Market cap at $471.6B, most recent closing price at $522.12.

(List Compiled by George Tsemberlis All charts sourced from Zacks Investment Research. All other data sourced from Finviz.)

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– Sony Corporation(SNEChartDownload SEC Filings)
– Microsoft Corporation(MSFTChartDownload SEC Filings)
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Written by George Tsemberlis.


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