Do you doubt science as an investor?
Many institutional investors do, and now they've missed something that can make their clients more money. The thing they are ignorant of is what scientists call "cognitive ease," which only now is becoming familiar to behavioral researchers. And the company they've mistaken for a disc seller, Activision Blizzard (ATVI), is radiating cog-ease to its customers like the sun, bathing us in its life-giving heat.
This can be most easily observed in gamers who readily pay $60 to play Diablo 3, after 12 years of waiting. Or the ten million monthly subscribers to the most familiar (popular) MMO in the world. Then there is the pro-gamer circuit of players who literally live in the world of Starcraft 2, the real time strategy game of choice, who have been observed dying after playing too long, immersed in a state of cog-ease and pleasure.
Science tells us the familiar makes humans more trusting, more at ease with the thing they are familiar with. The fact that these games have taken on familiar acronyms speaks to the conditioning power on lighting up the screen: COD, WOW, D3.
Let's put that aside for a minute and consider the generational shift and where future minds will be spending their money.
Generations that couldn't play video games due to controller incompetence are now playing video games on phones and tablets. These clever yet elderly gamers are a brand new, 100 million strong world market, just now opening to game publishers. These older, new gamers take their cues from the axiomatic game makers and gamers from the Pong and Donkey Kong era.
Those 1st generation gamers are making the games and guiding those after them on how to do this scalable job that scales the world in seconds. Developers are working with customers, also known as beta testers, or employees that work for free, creating a style of bottom up efficiency that rivals the great collective structures built throughout history.
This feedback loop into which Activision Blizzard has entered will reward it with untold treasure and riches, along with next minute access to the eyes, ears, hearts and minds of every customer. There are already enough minds searching for ATVI games this minute to assume this feedback loop is already in place, unnoticed by the fortune tellers called fund managers.
Let's now return to Behavioral Science. Familiar things erupt happy feelings in the viewer (the smiling foundation of a spend-happy customer). This familiar feeling brings forth a special mental state, what scientists call "cognitive ease." Once cog-ease is reached, people are more able and likely to be creative, feel happy, and spend money freely (clever readers have already realized this from their own experience).
With cognitive ease flowing through the veins of ATVI gamers, this amounts to digital drugs (side effects to come later), and the most respected dealer is Activision Blizzard.
Activision Blizzard is the new face of cognitive ease, and they can deliver this gift instantly and digitally at will, at a price that guarantees a profit. Today, with their future well in hand, ATVI can afford to wait and watch, as fund managers are squeezed into action, the painful realization planted on their expressionless, absent minded faces as they stare intently into their favorite game's bright and colorful screen.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.