Load Up On Activision Blizzard Shares Before Diablo 3 Release Date

| About: Activision Blizzard, (ATVI)

Recently, a picture of a Best Buy (NYSE:BBY) in Minnesota showed a release date of February 1 for the Diablo 3 video game. The picture went viral and led to wide speculation of when the game would be released.

There have also been rumors online of the game being released on consoles for the first time. While this would anger some hardcore PC fans, it would also increase revenue for parent company Blizzard. The company will not confirm the game being available for consoles but the company has hired several people to test the compatibility of the game on consoles.

Could the reason for the delay in release be because Blizzard is making sure the game is ready for consoles in time? In 1998, Diablo was released for Playstation after the initial PC release with the help of Electronic Arts (ERTS), but the game did not sell well and did little to win over PC fans of the game.

Back in 2000, when Diablo 2 was released, it sold over one million copies in less than two weeks. At the time this feat was good enough to be the fastest selling computer game of all time. The record has since been eclipsed by three other Blizzard titles, all from the World of Warcraft family.

It is hard to predict the sales of Diablo 3 without knowing if it will be hitting the Playstation 3 and XBOX 360 consoles or not. The first Diablo game sold 1.73 million copies, while the sequel sold 2.82 million copies (sales figures for United States only). In a recent article, I predicted Diablo 3 will sell 4.25 million copies in the United States. If the game is released on the two consoles, I would have to bump my sales estimates up to 6.5 million (1.25 XBOX 360, 1.0 PS3).

On Amazon.com (NASDAQ:AMZN), the video game is #154 on the best-selling video game stocks. The game is likely to climb up with any news of a release date. Gamers have been anticipating the game for so long that some are afraid to pre-order the game and have their hopes let down. As of January 14, Diablo 3 has 521,000 pre-orders, according to vgchartz.com.

At the beginning of the year, I selected Activision Blizzard (NASDAQ:ATVI) as a stock in my annual top 10 list. The prospects of having the game released on two consoles as well as the popular PC version have me bullish on this stock. In that article I set a price target of $20 by the end of the year for Activision Blizzard shares. I think shares will hit that number and I may look to raise the target price based on release date timing, move to consoles, and holiday season earnings.

I think now is the time to buy into Activision as the company has many positives going for it. On February 6, the company reports earnings. Analysts are predicting the company to report $0.56 in earnings per share. Activision has however beat estimates each of the last four quarters, including most recently a 100% and 250% beat over the last two quarters. Look for the company to report closer to $0.65 based on strong holiday sales from Modern Warfare 3 and Skylanders.

Disclosure: I am long ATVI.