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Yesterday, 5:48 PM
- Activision Blizzard (ATVI -5.9%) says in an 8-K that it's satisfied another of the terms related to its takeover of King Digital Entertainment (NYSE:KING) with clearance from South Korean regulators.
- The Fair Trade Commission of the Republic of Korea has given the OK to the $5.9B deal, leaving just a few steps left.
- The company must satisfy an EU Merger Regulation condition, and get sanction from the High Court of Ireland (where King is based) at a hearing set for Feb. 18. Activision says the scheme of arrangement is expected to take effect Feb. 23.
- Activision shares are up 0.5% after hours.
Mon, Jan. 25, 4:50 PM
- After a look at the holiday season, Credit Suisse is still bullish on a pair of videogame makers.
- The firm's Stephen Ju has reiterated Outperform ratings on Electronic Arts (EA +0.8%) and Activision Blizzard (ATVI -3.3%). He's got a Neutral take on Take-Two Interactive (TTWO -0.1%). Of those, it's EA that hasn't taken a hit over the past month; ATVI is down 10.8% and TTWO down 6%.
- The firm has maintained its price targets on EA ($90, 29% upside from today's $69.92) and Take-Two ($35, 4% upside from today's $33.61) and bumped its target on ATVI from $40 to $41 (18% upside from today's $34.73).
- “The biggest changes to the model come for ATVI as we adjust for Overwatch and layer in contribution for KING," Ju writes. "For EA and TTWO we have made only modest adjustments to our near-to-medium term unit volume estimates as the product release slate has not changed materially."
- Ju estimates Activision will sell 18M units of Call of Duty: Black Ops 3 in fiscal 2015, and that EA will still sell 12.85M units of Star Wars: Battlefront in fiscal 2016.
Thu, Jan. 14, 7:54 PM
- December marked a strong month for new videogames, though the sum was down slightly Y/Y likely due to drag from older-generation consoles.
- New games at retail sold at the pace of $3.22B, NPD Group reports, down from 2014's $3.26B. Hardware and software were down, though accessory sales rose 10%.
- A 4% increase in spending on newest-generation PlayStation 4, Xbox One and Wii U was offset by a 71% drop in PlayStation 3, Xbox 360 and Wii hardware. Overall, hardware sales fell 6% Y/Y. Unsurprisingly, December was the best month on record for software for the newest consoles.
- In U.S. new physical software: December is usually Call of Duty month and this one was no exception, as Call of Duty: Black Ops 3 (ATVI +1.6%) won the period, followed by Star Wars: Battlefront (EA +1.7%) and Fallout 4 (Bethesda Softworks). With holiday gifting, the rest of the chart was full of familiar names: Take-Two's (TTWO +0.6%) Grand Theft Auto V, sports games from EA and Take-Two, and Minecraft (MSFT +2.9%).
- As usual, Sony's (SNE -0.8%) PS4 was the top-selling console. It beat the Xbox One and Wii U (OTCPK:NTDOY -0.7%) in sales in every month except April and October, and it claimed the crown in the two best-selling months of the year (November and December). Sony says it's nearing 36M PS4s sold overall, after 6.4M-plus from this holiday season.
Wed, Jan. 13, 8:01 PM
- MKM Partners likes videogames in its Media & Entertainment outlook for 2016 -- and of those companies, Electronic Arts (EA -3.4%) is its top pick, though it also has praise for peers Activision Blizzard (ATVI -6.1%) and Take-Two Interactive (TTWO -3.3%) in that sector.
- MKM's joining a chorus noticing EA's strong game slate for this year, and it says the company should also benefit from continuing margin expansion, "which has been fueled by steady gross margin improvement and declining operating expenses," Eric Handler writes.
- The firm thinks EA can expand EPS growth through mobile sales of its popular game platforms and deploying excess cash in a variety of ways.
- Aside from gaming, MKM also points to Imax (IMAX -3.8%), theater operator AMC Entertainment (AMC -2.4%) and Time Warner (TWX -0.7%) as picks.
- Consumer confidence is looking good in the latter stages of the business cycle, it says, and "as a result, we believe companies best positioned to outperform this year are those in the midst of positive content cycles; and operating in more economically resistant segments, particularly video games, for which we have a very bullish outlook."
- Previously: Electronic Arts +1.4% as Piper stays upbeat (Jan. 13 2016)
- Previously: Electronic Arts launches subscription service for PC gamers (Jan. 12 2016)
- Previously: Cowen: Mobile gaming points to big quarter for EA (Jan. 07 2016)
Wed, Jan. 13, 1:00 PM
- Activision Blizzard (ATVI -3.2%) has added juice to its film/TV efforts by adding Quentin Tarantino-friendly producer Stacey Sher as co-president of its recently created studio.
- Sher has produced more than two dozen major films, notably including Tarantino's Pulp Fiction, Django Unchained and current release The Hateful Eight. She's a two-time Oscar nominee, for Django Unchained and for Erin Brockovich.
- She'll work alongside former Disney strategy exec Nick van Dyk to bring the studio's projects to life, starting with plans for animated series Skylanders Academy and for a "robust" cinematic universe based on Call of Duty.
- Previously: Activision creates TV/film studio to build off games; releases 'Black Ops 3' (Nov. 06 2015)
Thu, Jan. 7, 4:09 PM
- Cowen & Co. still loves Activision Blizzard (ATVI -1.4%) among videogame makers, but noted from its December Casual Digital Gaming Monthly survey that Electronic Arts (EA -1.9%) is poised for a "big" quarter in mobile gaming.
- Most mobile game makers haven't changed position, the survey suggests, but with customer acquisition costs high, the firm expects consolidation ahead (see: Activision's deal to acquire King Digital (KING -0.3%)).
- EA's mobile share, meanwhile, grew across the board, Cowen notes, and the company may see 50% Q/Q mobile revenue growth when it reports Jan. 26. Madden NFL Mobile actually displaced King's Candy Crush Saga from the No. 3 iPhone spot, and EA saw strength from Star Wars: Galaxy Heroes as well.
- Previously: Cowen sees strong videogame holiday, with Activision its top pick (Dec. 02 2015)
- Previously: Activision +2.7% as analysts boost targets on King deal (Nov. 04 2015)
Dec. 11, 2015, 2:49 PM
- NPD estimates U.S. physical retail video game sales fell 7% Y/Y in November to $993.9M, after having dropped 3% in seasonally weaker October to $349.4M. Aggressively-priced console bundles likely weighed on standalone game sales. Hardware sales rose 11% to $1.12B after being roughly flat in October, and peripheral/interactive toy sales rose 6% to $357.7M after rising 18% in October.
- Not surprisingly, Activision's (ATVI -3.2%) Call of Duty: Black Ops III was the month's top-selling game, followed by Bethseda's Fallout 4. However, Activision's Destiny: The Taken King fell out of the top-10, after coming in at #7 last month.
- Electronic Arts' (EA +1.2%) Star Wars: Battlefront, which recently saw a $20 GameStop price cut amid mixed critic and user reviews, was #3. EA also took the #4, #6, and #7 spots via Madden NFL 16, FIFA 16, and Need for Speed. Madden and FIFA were also #4 and #6 last month.
- Take-Two's (TTWO -1%) NBA 2K16 dropped three spots to #5, while WWE 2K16 fell out of the top-10. Ubisoft's (OTCPK:UBSFY) Assassin's Creed: Syndicate and Just Dance 2016 were #9 and #10; neither was in the top-10 last month.
- Microsoft's (NASDAQ:MSFT) Halo 5: Guardians fell from #1 to #8. With Halo 5 providing less of a lift to Xbox One sales, the PlayStation 4 (NYSE:SNE) regained its status as the top-selling U.S. retail console.
- EA remains green following the data and news the company is entering the eSports market. Activision (like GameStop) is underperforming amid a 1.8% Nasdaq drop, and Take-Two is down modestly.
- Last month: Black Ops 3 sells $550M in opening weekend
Nov. 23, 2015, 11:55 AM
- Major videogame makers are trading lower today despite modest broader market gains, after key retailer GameStop posted disappointing earnings and guidance today.
- Electronic Arts (NASDAQ:EA) is off 5.8%, Activision Blizzard (NASDAQ:ATVI) down 0.6% and Take-Two Interactive (NASDAQ:TTWO) off 1.7% following the results.
- Revenues declined at GameStop (counting currency effects) and its sales mix tilted toward pre-owned games, as the percentage of sales devoted to new video game hardware and new software both declined.
- Previously: GameStop craters after earnings and guidance disappoint (Nov. 23 2015)
- Previously: GameStop misses by $0.05, misses on revenue (Nov. 23 2015)
Nov. 17, 2015, 3:18 PM
- It's launch day for Star Wars: Battlefront, one of the year's biggest videogame rollouts, but Electronic Arts (NASDAQ:EA) may want to skip the earliest reviews.
- The game is getting a 73 rating -- "mixed or average reviews" -- on Metacritic for its Xbox One version (15 critics). The PlayStation 4 version is faring a bit better with a 78 (generally favorable), from 13 critics.
- EA shares are flat today, while rivals Activision Blizzard (ATVI +3.1%) and Take-Two (TTWO +2.4%) are much stronger.
- Mizuho's Neil Doshi is unperturbed; many of the worst reviews were from people expecting a single-player campaign, he says, and major sites have yet to post their takes. He still agrees with EA that the company could sell 13M units by the end of March and reiterated a Buy rating and $84 target (near 24% upside implied).
- Along with reviewers, Piper Jaffray's Michael Olson noted a dearth of content in the game as sold, but industry trends suggest that can be remedied by a year of strong downloadable content that EA could provide. Olson has an Overweight rating and an $87 price target.
- Previously: EA +1% as Oppenheimer launches at Outperform on strong slate, margins (Nov. 12 2015)
- Previously: Electronic Arts sinks 5% after beat-and-raise, bullish targets (Oct. 30 2015)
- Previously: Electronic Arts +1.6% as Piper Jaffray reiterates Buy (Oct. 27 2015)
Nov. 4, 2015, 3:53 PM
- As analyst takes pile up, some bullishness is rolling in for Activision Blizzard (ATVI +2.7%) following news of its $5.9B deal to acquire King Digital (KING -0.5%) -- a price tag that has stirred debate over whether Activision overpaid.
- Cowen's Doug Creutz had called the deal a "steal" yesterday. Wedbush raised its price target on Activision to $47, from $37, reiterating an Outperform rating, and sees a "mobile powerhouse" coming from a combo that "makes eminent sense."
- Activision gains a lot by buying mobile development rather than spending a decade to build it out, Wedbush says. The firm believes the addressable market for mobile games is close to $24B now, and could grow 15-20% a year over the next five.
- With Activision currently trading at $36.78, Wedbush's target implies 27.8% upside.
- Pacific Crest calls this "one of the most 'Activision' of Activision deals it has ever done," pointing to 30% accretion to 2016 earnings and unlocking overseas cash. Activision will use $3.6B in offshore cash along with a term loan to seal the deal.
- The firm says modest growth at King may be inconsequential in the long run. It boosted its price target on Activision to $41 from $31 (implied 11.5% upside from current price) and maintains an Overweight rating.
- Previously: ATVI down -2.8% after 'steal' in King deal; GLUU, ZNGA higher (Nov. 03 2015)
- Previously: Activision earnings: Solid beat on top and bottom lines, record digital revenue (Nov. 02 2015)
- Previously: Activision Blizzard to acquire King Digital for $5.9B (Nov. 02 2015)
Nov. 3, 2015, 9:50 AM
- Activision Blizzard (NASDAQ:ATVI) is off 2.8% in the wake of last night's surprise announcement that it was buying Candy Crush Saga regents King Digital (KING +14.1%) for $5.9B.
- Cowen's Doug Creutz reiterated his Outperform rating on Activision, calling the deal "an absolute steal for Activision" that "immediately vaults them to being one of the top mobile gaming companies in the world." He has a $35 price target on the stock; just over 4% upside from today's trading of $33.60.
- Meanwhile, Jim Cramer says "If [Activision chief Bobby Kotick] says this is a good deal, it's a good deal."
- With the deal, King may have "solved" its dilemma of how to keep converting players into payers, as the company never quite got beyond the dependence on a single franchise (however lucrative).
- King's mobile and social game rivals are trading up on the acquisition news as well; Glu Mobile (NASDAQ:GLUU) is up 5.2% in early going, while Zynga (NASDAQ:ZNGA) is up 2.5%. Majesco Entertainment (NASDAQ:COOL) is up 6.3%.
Nov. 2, 2015, 10:47 PM
- Activision Blizzard (NASDAQ:ATVI) has announced a deal to acquire King Digital Entertainment (NYSE:KING), makers of Candy Crush Saga and other mobile games, for $5.9B in equity value.
- The company posted its earnings as well, logging non-GAAP revenues of $1.04B and EPS of $0.21.
- The deal for King represents $5B in enterprise value. At $18 in cash per share, it's a 20% premium over King's Oct. 30 closing price and a 15.8% premium over today's close (King shares gained 4% to $15.54 today).
- Both boards have unanimously approved the deal -- a scheme of arrangement under Irish law -- and so it heads to approval by King shareholders and the Irish High Court, with closing expected by Spring 2016.
- Activision's cash portion will be funded by $3.6B of offshore cash on its balance sheet and a term loan under an existing $2.3B credit agreement.
- Activision and King will host a call at 8 a.m. ET tomorrow to discuss the acquisition and answer questions.
- Deal summary presentation
Oct. 22, 2015, 2:13 PM
- Activision Blizzard (ATVI +2.7%) is increasing its bet on "e-sports" -- competitive videogaming as a spectator sport -- with a pair of high-profile hires to lead a new division.
- Steve Bornstein, former CEO of ESPN and the NFL Network, will be chairman of the new unit, with Mike Sepso (co-founder and president of Major League Gaming) serving as senior vice president.
- "I believe e-sports will rival the biggest traditional sports leagues in terms of future opportunities, and between advertising, ticket sales, licensing, sponsorships and merchandising, there are tremendous growth areas for this nascent industry," said Bornstein.
- Blizzard has been an early adopter of televised e-sports with its franchises StarCraft and World of Warcraft, and got its "Heroes of the Dorm" collegiate event for Heroes of the Storm telecast on ESPN2 earlier this year.
- Meanwhile, the Activision side has big plans for annual international championships around Call of Duty.
- Previously: E-sports: Activision widens competition; Turner has prime-time plans (Sep. 24 2015)
Oct. 14, 2015, 9:15 PM
- Demand is still strong among teens for the newest generation of videogame consoles, Piper Jaffray says -- and that's good news for leading game makers like Activision Blizzard (ATVI +0.4%) and Electronic Arts (EA +3.1%).
- Uptake of the Xbox One (MSFT -0.5%) and PlayStation 4 (SNE -1.5%) consoles "is at the highest level we have seen, reinforcing our expectation for a much more rapid pace than prior-gen" consoles, says analyst Michael Olson, a "clear positive" for Activision, EA, Take-Two Interactive (TTWO +0.2%) and retailer GameStop (GME -1.1%).
- The firm's semiannual survey found 73% of videogame-playing teens own an Xbox One or PlayStation 4, or intend to get one -- up from 70% last spring and 67% last fall. Some 39% currently own one of the newer consoles, up from 37% in the spring and 26% last fall.
- "We believe the combination of next-gen console uptake and a robust lineup of AAA titles will lead to sustainable software growth through second-half 2015 and into 2016," Olson writes.
- Mobile players are stable, but the number who'll pay is rising as well. Some 24% of teens who play mobile games by makers like Glu Mobile (GLUU +1.2%) and King Digital (KING -0.4%) say they spend in-game money, the survey said, up from 21% in the spring.
Sep. 28, 2015, 3:51 PM
- Cowen & Co. is seeing what they like from content investments at Activision Blizzard (ATVI -2.2%), bumping its price target to $35, from $28.
- Cowen's Doug Creutz maintains his Outperform rating on the stock. Shares closed Friday at $32.06 and are currently trading at $31.35, implying 12% upside from here.
- The firm raised its EPS estimates for fiscal 2015 (to $1.39 from $1.34) and 2016 (to $1.61 from $1.51).
- Activision Blizzard should see significant sales growth for the next few years from its recent lineup, he says; major updates from Hearthstone and Destiny are performing well, with record user levels hitting up Destiny: The Taken King.
- “We expect both games to be key drivers of upside in Q3,” Creutz says, and the firm sees advance interest in the upcoming Black Ops 3 to be strong. He also expects that declines in World of Warcraft and Skylanders could slow or stop.
- Previously: Activision up after 'Destiny' expansion sets download record (Sep. 17 2015)
Sep. 24, 2015, 2:48 PM
- With the rumbling on of e-sports -- videogames played as professional competition -- Activision (ATVI -0.6%) is expanding its presence in Call of Duty contests, moving from an annual tournament to year-round competition with a tripled prize pool.
- What was a $1M tournament will become $3M for international leagues with pro and amateur divisions, with a year-end championship. The "Call of Duty World League" will launch in early 2016 in North America, Europe, and Australia/New Zealand.
- Meanwhile, TBS (TWX -2.4%) is bringing e-sports to primetime TV, creating a league along with talent agency WME/IMG that will feature live Friday night events for a 20-week season. A 2016 launch will happen in the game Counter-Strike: Global Offensive.
- E-sports' audience is estimated at 32M people in the U.S., expected to hit 50M in 2017, and about 200M worldwide live and online viewership.
Activision Blizzard Inc is an online, personal computer, video game console, tablet, handheld, and mobile game publisher. It has three operating segments: - Activision Publishing, Inc., Blizzard Entertainment, Inc. and Activision Blizzard Distribution.
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