Eric Hirshberg, President and CEO of Activision Publishing believes that this is one of the best combination of titles in company’s history exhibited at the expo and has high expectations from these franchises going ahead.
Activision reported better-than-expected results in its first fiscal quarter report last month, with strong performances from core franchises and expansion in the digital domain.
With plenty of games to be launched this holiday season, core gamers finally have a reason to upgrade to next generation consoles.
Activision Publishing, Inc., a wholly owned subsidiary of Activision Blizzard (NASDAQ:ATVI) showcased an eventful lineup at the 2014 Electronic Entertainment Expo (E3), which took place in Los Angeles June 10-12. The company unveiled some of its best products but the highlights of the show were the highly anticipated trio: new Call Of Duty (COD) franchise- Call Of Duty Advanced Warfare, new innovative title from Skylanders brand- Skylanders Trap Team and the most awaited game of the year -Destiny. Eric Hirshberg, President and CEO of Activision Publishing believes that this is one of the best combination of titles in company’s history exhibited at the expo and has high expectations from these franchises going ahead.
Activision reported better-than-expected results in its first fiscal quarter report last month, with strong performances from core franchises and expansion in the digital domain. The latest edition of the company’s flagship franchise, Call of Duty: Ghosts topped the charts last year in terms of reported sales in the First Player Shooter (FPS) genre on the recently launched eighth generation Microsoft and Sony consoles. Activision’s innovative toys-to-life franchise Skylanders has been revenue generating as well.
Our $21 price estimate for Activision Blizzard’s stock is in line with the current market price.
New Releases To Lead FPS Segment
As mentioned earlier, Call Of Duty: Ghosts led the first-person shooter (FPS) segment in the fiscal year 2013 in terms of worldwide sales, accounting for nearly 45% of the market share. The above mentioned figure excludes the contribution of the older versions of Call Of Duty which were still in demand last year, including which the market share for this popular franchise rises to 56%. The game accounted for more than $1 billion in sales to retailers in its first three days of release in the market. Evidently, Call Of Duty is the most in-demand title for gamers interested in FPS games for the past couple of years and might remain a perennial franchise for Activision.
Recently, Activision launched its third massive Downloadable Content (DLC) for COD: Ghosts exclusively on Xbox live for Xbox One and Xbox 360 consoles. In E3, the company unveiled its newest edition of this franchise: COD Advanced Warfare and promises it to be the biggest edition yet with improved graphics, advanced controls & weapons and an exoskeleton gameplay. Looking at the popularity of the franchise among the core gamers and the success of its previous versions following its launch, this title might provide a positive push to title sales.
The highly awaited title of the year Destiny, a role playing FPS game, was the center of attraction among gamers. The game features a unique multiplayer system, with an innovative combination of multi-level gameplay integrated into an online world.
With the two mega- releases scheduled for launch this holiday season, the company is targeting to drive its software sales, which have been lagging behind the consoles sales for the last few quarters. Both the titles will be available for all major gaming platforms including Microsoft (NASDAQ:MSFT) Xbox and Sony (NYSE:SNE) PlayStation consoles. Already a dominant force in FPS genre, Activision aims at strengthening its hold over the segment as Electronic Arts (NASDAQ:EA) is rapidly climbing up the ladders in this segment with its Titanfall & Battlefield franchises stealing market share from Activision’s Call of Duty. EA also revealed the prototype and launch date for the newest edition of Battlefield to be released this fall season alongside Activision’s FPS games. With plenty of games to be launched this holiday season, core gamers finally have a reason to upgrade to next generation consoles. Trefis charts below show our forecasts for the company’s title sales for the two major gaming platforms.
With the rising interest and a considerable shift of gamers to the digital domain, online subscriptions for Call of Duty’s elite premium services might get a further boost once it is available for download.
Skylanders: Toy Sales To Boost Revenues
Activision also introduced its newest installment to the role playing portal based franchise Skylanders with Skylanders: Trap Team. The game based on toys-to-life theme has been a great success and was among the two top games in North America and Europe. Skylanders is an innovative franchise which requires gamers to purchase physical models of the franchise’s characters for the user to access the character. Activision has sold over 175 million toys since the launch of the franchise, generating over $2 billion in revenues. The new portal based edition will allow gamers to capture characters on-screen in a “magical crystal trap” and then play with these characters.
The gaming giant expects the toy sales to reap huge profits after the launch of this game. For its promotion, the company has also initiated a special pre-order plan for toys. The game will be launched on October 5 in North America for all the major gaming consoles.
Activision has huge confidence on its core franchises and expects them to not only revive title sales but to be more successful than any of their previous editions, making them a great force to reckon with in the industry.
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