Back in January, I encouraged readers and investors to "Load up on Activison Blizzard shares before Diablo 3 release date". That day was officially announced this morning as the highly anticipated third installment of Diablo will come to Windows and Mac computers on May 15th. Look for Activision Blizzard (NASDAQ:ATVI) to gain traction as new forecasted earnings, and analyst upgrades will likely be signaled by this release date.
The game will be released on May 15th in the following regions in retail stores:
- United States
- South Korea
- Southeast Asia
- New Zeeland
- Hong Kong
In other regions the game will only be available as a digital download from battle.net. Those countries are:
A localized version of the game will be release on June 7th in:
- Latin America
The game is available for pre-sale on battle.net beginning today which will ensure that the minute the game is released you can begin playing. The standard version of the game will sell for $60, while a collector's edition will sell for $100. The collector's edition includes the game along with: a Behind the Scenes Blu Ray/DVD, soundtrack, art book, USB stick with both previous Diablo games, corresponding Diablo themed base, and downloadable in-game content for all Blizzard games. A quick look at Amazon's (NASDAQ:AMZN) bestselling video games list shows:
1. Diablo 3 - Collector's Edition
2. Diablo 3 - Standard Edition
Other Activison Blizzard games on today's list:
10. Call of Duty: Modern Warfare 3 XBOX 360
12. Call of Duty: Modern Warfare 3 Playstation 3
76. Call of Duty: Black Ops XBOX 360
86. Call of Duty: Black Ops Playstation 3
90. Starcraft 2: Heart of the Swarm
92. Call of Duty: Modern Warfare 2 XBOX 360
Gamers have been waiting more than 10 years for the next installment of the Diablo game. A summary of the game from Blizzard's website:
Twenty years have passed since the Prime Evils were defeated and banished from the world of Sanctuary. Now, you must return to where it all began - the town of Tristram - and investigate rumors of a fallen star, for this is the first sign of evil's rebirth, and an omen that the End Times have begun.
One huge thing to keep in mind with Diablo III is the Auction House. For the first time in a Blizzard game, a real life auction house will be used hosted on the battle.net website. Items from the game will be available for purchase with real money or gold earned in the game. Blizzard will be paid fees based on the sale of items. If the auction house is successful it will likely make its way into other Blizzard or Activision projects. The auction house, run by Blizzard, will hopefully cut down on illegal selling of MMORPG items. In my last article, there were many comments about China and other Asian regions are not in support of the Real Money Auction House. Players of the game will also be allowed to sell some items with set prices, similar to eBay's (NASDAQ:EBAY) Buy it Now option on auctions. EBay could also be a winner as users can cash out from auctions with Paypal as an option.
In December, I previewed what I thought would be the top selling video games of 2012. In that article, I predicted Diablo 3 would sell 4.25 million copies in the United States. Analysts are now calling for around 5 million copies. I think that I will keep my conservative estimate of 4.25 million copies but think that the real money auction house as well as downloadable content could make Diablo 3 a game changer for Activision Blizzard. The first Diablo game sold 1.73 million copies in the United States, while the sequel in 2000 sold 2.82 million copies.
Activision Blizzard has an amazing 2012 laid out before it with releases of Diablo 3, a new Call of Duty game, a new Skylanders game, a World of Warcraft expansion, a Starcraft 2 expansion and Prototype 2. The Blizzard arm of the company will have its busiest year ever with releases from all three major components. The integration of the battle.net website along with the real life auction house will help power Blizzard to its most profitable year.
The current March quarter has analysts' expected earnings of $0.04 per share. The quarter after Activision is forecasted to earn $0.16. The release of Diablo 3 will likely see those forecasted earnings rise as well as the 2012 target of $0.95. Over the past four quarters, Activision Blizzard has beat forecasted earnings by: 10.7%, 250.0%, 100.0%, and 62.5% (from most recent to least recent).
Shares closed up a mere 1% on the news today of the Diablo 3 release date. When I selected Activision Blizzard as one of my top ten stock picks for 2012, shares were trading at $12.32. All ten stocks are up from the start of the year and Activision is actually one of the worst performers. In that article, I selected Activision Blizzard for three main reasons:
1. Release of Diablo 3
2. Strong 2012 Lineups from both Activision and Blizzard Units
3. Increasing Dividends
Shares traded as high as $14.40 in 2011. I have owned shares of Activision Blizzard for several years and wouldn't consider selling them anytime soon. I am looking for shares to hit $20 over the next two years. Do yourself a favor and take a look at this company before May 15th.
Disclosure: I am long ATVI.