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- ATVI leads video game sales with Advanced Warfare in November.
- AW still down 49% compared to MW3, marking the third straight year of declining YOY sales for Call of Duty titles.
- Weak November figures lead to some downgrades on company prospects by investors.
- ATVI's World of Warcraft celebrated its 10th anniversary in November, as game shows signs of life following successful Draenor release.
- Still commands 34% market share, but facing stiff MMORPG competition thanks to alternative pay models.
- Some areas that might need fixing: subscription-based pay model, greater emphasis on casual gamers.
- Activision has reported revenues of $753 million as compared to the $691 million in revenue generated in the same period last year, beating the expectation of analysts.
- EPS grew by more than 10 cents as the company saw sales driven by the launch of the new and current gaming franchises.
- MMORPG is experiencing tough competition. However, FPS games remain a safe haven for the company. FPS expansion in China is planned with the launch of the Call of Duty community.
- The new releases as well as releases under old titles prove that Activision not only plans to maintain its control on the market but hopefully expand its consumer base.
- Stock highly likely to perform well in the coming months on the back of better results for the upcoming holiday season and new releases driving sales.
- ATVI released its CoD and WoW initial sales commentary suggesting positive y/y growth.
- GTA V sales and Battlefield expansion in March'15 could trigger upside.
- I remain a buyer of ATVI.
- ATVI impressed on earnings, owing largely to strong future expansion predictions.
- It may be the first US video game company to solve the $8B riddle of the Chinese PC gaming market.
- Warcraft set to post two straight quarters of subscription growth, thanks to Draenor expansion.
Activision Q3 2014 Review: Solid Results On Destiny; Call Of Duty To Drive Q4WestEnd511 • Wed, Nov. 12
- ATVI reported a solid beat on both EPS and EBITDA.
- Destiny and WoW continue to attract subs.
- Q4 pipeline looks promising. I reiterate my bullish view.
Activison Blizzard Returns Year After Year For Gamers And Investors
- ATVI has been paying and increasing dividend payments since 2011.
- ATVI's total return for investors has outpaced its industry by a comfortable margin.
- The diversity of its franchises adds a margin of safety for the company in terms of sales and investors in terms of earnings.
- ATVI continues to beat earnings estimates set by analysts.
- ATVI has a plan and is making great strides in expanding to different sources of revenues.
- Activision Blizzard reported solid third quarter results along with an increased full year guidance.
- Fourth quarter guidance may prove to be conservative.
- Activision faces easy comps in the first half of 2015.
- ATVI beats again on earnings thanks to the success of Destiny, Hearthstone, and Warcraft.
- Warcraft's subscription boost is positive indicator as Warlords of Draenor expansion looms.
- Revenue, profit beat lead to increased year-end estimates to $4.8 billion in revenue.
Update: Activision Earnings - The Q4 Guidance Offers Major Upside Once Again
- Strong Q3 results. “World of Warcraft” subscribers unexpectedly increase.
- Activision raises its FY outlook but fails to impress, notably at the top-line level with a $4.8B guide while I expected a more aggressive upgrade ($4.9-5.0B).
- The Q4 guidance does not make any sense as it points to a 3% revenue decline Y/Y. Activision is managing consensus expectations in order to deliver a strong beat again.
Here's The Blockbuster Game Activision Blizzard Is Banking On
- Activision Blizzard is set to report third quarter earnings on Tuesday, November 4 after the market closes.
- So far this has been a great earnings season for the large video game producers.
- Analysts on Estimize and Wall Street are both expecting a huge uptick in Activision Blizzard's 3rd fiscal quarter, although the Estimize community is significantly more bullish on the bottom line than the Street is.
Activision: Fiscal Year Guidance Likely To Be Upgraded On Nov. 4
- Q3 (due Nov. 4) will be strong but this is already priced in.
- The focus will be on Q4 / FY guidance.
- Consensus expects 3% top-line growth in Q4. Such a weak revenue growth in the holiday season does not make sense.
- I believe that Activision could guide for double digit revenue growth in Q4.
Activision: A Likely Winner Of The Holiday Season, Recent Dip A Buying Opportunity
- The competitive environment will be pretty soft in the crucial holiday season and, in my view, Activision will have the strongest lineup.
- The Street's expectation of 5% revenue growth in Q4 appears overly conservative.
- The recent concerns are overdone; the sell-off is a buying opportunity.
With Cameras Rolling, Worlds Inc. Battles Activision Blizzard October 3
- Camera's In the Court Room to "STREAM" patent infringement Markman Hearing.
- 3-D Online Multi-Player Patent Holder Worlds Inc won't feel the pinch of trial costs all the way to the US Supreme Court; courtesy of Susman Godfrey.
- Investors get unfiltered video access of key legal events In Worlds v. Activision Blizzard.
- Supposedly "World of Warcraft's" successor, ATVI's "Titan" has officially been cancelled.
- Ends 4 years, $140 million of investment and development for a game that wasn't "fun".
- Results in another setback in what was supposed to be the "biggest second half ever".
- ATVI's "Destiny" rakes in $325M in initial sales, below the initial $500M reports.
- Mixed reviews on the game largely due to "conventional" play and lack of open world depth.
- Stock price slips roughly 10% over last two weeks, might be a cheap pick-up come earnings time?
Activision's Destiny Is A Hit, But Critics Cite Lack Of Content
- Destiny rakes in $500 million in revenue during the 24 hours after its launch.
- Some analysts see Destiny making almost $1 billion in sales during 2014.
- The upcoming holiday season could see a continued surge in Destiny sales, which would be huge for Activision as it adds a new franchise to the portfolio.
- Reviews of Destiny have been lackluster, which is major concern considering how well the game has sold.
- Bad reviews could take out Destiny's "legs" in regards to future sales.
Fri, Apr. 18, 4:34 AM
- Microsoft (MSFT) has sold over 5M Xbox One computer gaming consoles to retail shops since launching the device in November, well below the more than 7M PlayStation 4 machines that Sony (SNE) has sold since its product was launched last year as well.
- Still, Xbox One sales have outpaced those of its predecessor, the XBox 360, by over 60% at the same point in time since launch.
- The introductions of the Xbox and PlayStation 4 helped boost U.S. sales of consoles in March by 78% on year to $395M.
- However, sales of videogames fell 28% to $432M, with revenue to multiplayer Internet games such as "World of Warcraft" dropping 19% to $84.8M.
- Tickers: EA, ATVI
Thu, Apr. 17, 6:58 PM
- While U.S. physical retail video game sales have been slumping for some time (as shown by NPD's data), SuperData estimates U.S. digital gaming revenue rose 9% Y/Y in March to $936M.
- Revenue for subscription titles such as Activision (ATVI +1.2%) cash cow World of Warcraft fell Y/Y, but download and free-to-play revenue rose. Electronic Arts' (EA -0.1%) much-hyped Titanfall delivered the most digital revenue among "boxed" titles.
- SuperData estimates conversion rates (i.e. the ratio of paying users to total users) for social gaming platforms rose to 2.3% from 1.9% six months earlier. But Zynga (ZNGA +4.4%), which had a Q4 conversion rate of 1.7% and only averages $0.13 per DAU (less than its closest rivals), continues to trail.
- Zynga rallied today after officially launching FarmVille 2: Country Escape (first announced in March) in the App Store and Google Play. Morgan Stanley praised the game's monetization potential last week.
- In spite of widespread concerns about slumping Candy Crush Saga (KING -1.3%) usage, SuperData thinks the game is holding up reasonably well for now. It estimates spending rose 1.2% M/M (3 extra days helped), with mobile MAUs rising 0.3% and social (read: Facebook) MAUs falling 2.1%.
- Other game developers: TTWO, GLUU, KNM, SGAMY
Fri, Apr. 4, 5:23 PM
- Activision's (ATVI) shelf registration paves the way for Vivendi (VIVHY) to halve its remaining stake to 5.8% through a future offering. (S-3)
- At current levels, such a sale would yield Vivendi gross proceeds of $830M. The filing comes 9 months after Vivendi agreed to sell most of a 60% stake in Activision through an $8.2B leveraged recap deal.
- ATVI -0.8% AH
Thu, Mar. 13, 9:28 AM
- BofA/Merrill's Justin Post has upgraded Activision (ATVI) to Buy, and cut archrival Electronic Arts (EA) to Neutral.
- Post sees several catalysts for Activision, including an upcoming Diablo 3 expansion pack, the 2H14 arrival of a World of Warcraft expansion pack and (possibly) a Chinese online version of Call of Duty, and (most notably) the Sep. 9 launch of first-person shooter Destiny, which Activision thinks could be its third billion-dollar franchise.
- His 2015 Activision EPS forecast has been raised to $1.38 from $1.31, and his PT to $25 from $20.
- As for EA, Post sees fewer catalysts following the March 11 Titanfall launch, and "more compelling content" over the next six months from the likes of Activision, Ubisoft, and Sony. Though he thinks EA has strong FY16 (ends March '16) growth potential thanks in part to new Battlefield and Star Wars launches, he doesn't see any titles driving major FY15 upside.
Fri, Feb. 7, 7:15 PM
- More than two decades have passed since Activision (ATVI +14.4%) last traded at current levels, as a Q4 beat, slight dividend hike, World of Warcraft subscriber growth, and game pipeline enthusiasm took precedence over below-consensus 2014 guidance.
- Rivals Electronic Arts (EA +2.8%) and Take-Two (TTWO +2.2%) joined in on the fun. Shares of both companies are roughly $1 removed from their respective 52-week highs.
- BofA/Merrill's Justin Post notes Activision has a history of issuing conservative full-year guidance to start the year, and considers the WoW sub growth a pleasant surprise.
- Wedbush's Michael Pachter is upbeat about a 2014 pipeline that includes updates to WoW and Diablo III, and the launch of anticipated open world first-person shooter Destiny. He thinks the game could produce $500M or more in sales following its September release.
- Activision stated on its CC (transcript) it thinks Destiny could be its third billion-dollar franchise (after Call of Duty and Skylanders), and that it's moving to a 3-year development cycle for Call of Duty titles (three studios take turns launching titles) to allow for better game development.
Fri, Feb. 7, 9:10 AM
Thu, Feb. 6, 4:48 PM
- Activision's (ATVI) guidance is a little soft, but investors don't seem to mind. The game developer expects Q1 revenue of $675M and EPS of $0.09 (below a consensus of $679M and $0.11), and 2014 revenue of $4.6B and EPS of $1.26 (below a consensus of $4.6B and $0.09).
- The company has also announced it's hiking its dividend by a penny to $0.20/share (1.2% yield), and is repaying a $375M term loan.
- Also of note: World of Warcraft subs, declining in recent quarters, managed to rise by 200K in Q4 to 7.8M.
- Console-related sales fell 14% Y/Y in Q4, and made up 64% of revenue. Online subscription sales (9% of revenue, heavily tied to World of Warcraft) fell 27% and made up 9% of revenue; PC sales (5% of revenue) fell 4%, distribution sales (8% of revenue) rose 29%, and all other sales (inc. mobile and toys/accessories) fell 14%.
- North American sales (53% of total) -8% Y/Y, Europe (40% of total) -14%, Asia-Pac (7% of total) -34%.
- R&D spend -11% Y/Y to $197M. Sales/marketing +8% to $239M.
- ATVI +7.1% AH. CC underway. Q4 results, PR.
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Thu, Feb. 6, 12:10 AM| 4 Comments
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Fri, Jan. 31, 4:50 PM
- Less than 18 months after launching The Blast Furnace, the company's first mobile game studio, Activision (ATVI -0.8%) says it's "exploring all our options" regarding the U.K. studio as part of its efforts to align its 2014 resources with "anticipated business requirements."
- The Blast Furnace has been responsible for mobile games Call of Duty: Strike Team and Pitfall!. Compared with Electronic Arts (delivered $124M in mobile revenue last quarter), Activision has maintained a small mobile profile. Activision Publishing chief Eric Hirshberg stated last year he thinks "consoles are still the go-to" for his company.
- More than a few major game developers have struggled to effectively monetize mobile titles in the face of intense competition and fickle consumer tastes. Activision's comments come ahead of its Feb. 6 Q4 report.
Fri, Jan. 17, 9:31 AM
- Electronic Arts' (EA +11%) Battlefield 4, Madden NFL 25, and FIFA 14 respectively claimed spots #2, #4, and #9 on NPD's December bestseller list for U.S. physical retail game sales. Those rankings are hardly changed from November (#2, #4, and #10). Moreover, EA's total sales through the physical retail channel rose an estimated 47% Y/Y.
- "EA Scores December Hat Trick," reads the title of a bullish Cowen report. The firm thinks NPD's numbers suggest EA has a shot at beating consensus estimates and guidance forecasts when it reports on Jan. 28. Longbow, which had been prepared to cut its EA estimates in response to NPD's numbers, is hiking them instead.
- On the other hand, NPD thinks Activision's (ATVI -0.1%) U.S. physical retail sales fell 40% Y/Y in December, thanks in part to tough Call of Duty comps. Call of Duty: Ghosts was the bestselling title for the second straight month, but Skylanders: Swap Force fell to #10 from #7. Shares +0.9%.
- Take-Two's (TTWO +2%) Grand Theft Auto V, which debuted in September to record sales, fell to #7 from #5. NBA 2K14 rose a spot to #5.
- Altogether, NPD thinks U.S. physical retail game sales, still pressured by a shift to digital channels and mobile gaming, fell 17% Y/Y. That's a little better than November's 24% drop.
- Previous: EA, Activision, Take-Two underperform after GameStop warns
Tue, Jan. 14, 2:27 PM
- Activision (ATVI -1.7%), Electronic Arts (EA +0.3%), and Take-Two (TTWO -1.2%) are underperforming on a strong day for tech stocks after GameStop (GME -19.4%) reported disappointing holiday game sales and issued a Q4 EPS warning.
- Though GameStop saw its new hardware sales (a low-margin business) double Y/Y thanks to the PS4/Xbox One launches, a bigger-than-expected decline in PS3/Xbox 360 game sales led new software sales (high-margin) to drop 22.5% Y/Y. Pre-owned sales rose 7%, and digital sales 15%.
- Compared with peers, Electronic Arts is holding up relatively well thanks to a Credit Suisse upgrade to Outperform. EA reports on Jan. 28, and Take-Two on Feb. 3. If history is any guide, Activision should report in early February.
Tue, Jan. 7, 1:30 PM
- Sony (SNE +0.1%) announces at CES PlayStation 4 end-user sales (i.e. sell-through) reached 4.2M as of Dec. 28. That figure suggests the PS4 soundly outsold the Xbox One (MSFT - 3M+ sales in 2013) last year, and has a good chance of surpassing Sony's target of 5M FY14 (ends March '14) sales.
- Wider distribution - the PS4 is on sale in 53 countries, the One is only available in 13 - has helped Sony's next-gen console outsell Microsoft's. But so has a lower price tag ($399 vs. $499) and the backlash to the used game restriction and Internet access requirements initially planned for the One (before Microsoft backtracked).
- Sony has also announced the launch of PlayStation Now, its anticipated cloud gaming service. The service, which leverages Gaikai's cloud gaming platform, will provide access to PS2/PS3 titles, and (since it's cloud-based) run on everything from home consoles to TV sets to handheld/mobile devices.
- Also announced: a Web-based TV service that will include VOD content and a cloud-based DVR. However, Sony is short on details for now. Intel and others have taken stab at offering such a service, only to be thwarted by content owners and incumbent pay-TV providers.
- PS4 and Xbox One CPU/GPU supplier AMD (AMD +1.6%) is rallying for the second straight day. Game developers are also higher: EA +3.2%. TTWO +3.2%. ATVI +1.6%.
Dec. 13, 2013, 11:08 AM
- NPD estimates U.S. physical retail video game sales fell 24% Y/Y in November, after having risen 12% in October and (thanks to the Grand Theft Auto V launch) 52% in September. The fact many gamers directed their discretionary income towards buying next-gen consoles may have played a role here.
- Electronic Arts (EA +7.2%) investors appear pleased Battlefield 4 came in at #2 on NPD's bestseller list, in spite of the well-publicized bugs and gameplay issues EA is scrambling to address. In addition, Madden NFL 25 is ranked #4 after falling out of the top-10 in October, and FIFA 14 is at #10.
- Activision's (ATVI +0.1%) Call of Duty: Ghosts topped the bestseller list, and Skylanders: Swap Force is ranked #7. Take-Two (TTWO +2%) investors appear content with the fact GTA V came in at #5 after easily topping NPD's list for two months; Take-Two's NBA 2K14 is ranked #6, up one spot from October.
- NPD also states the PS4 outsold the Xbox One in November both in terms of hardware and game sales. But that might simply be the result of an earlier launch (Nov. 15 vs. Nov. 22). Sony claimed 2.1M+ PS4 sales as of Dec. 3, and Microsoft claimed 2M+ Xbox One sales as of Dec. 11.
Dec. 6, 2013, 11:01 AM
- Electronic Arts (EA +4.6%) has recouped the lion's share of the losses it saw yesterday in response to news its DICE unit is halting work on future projects to fix Battlefield 4. The efforts of several analysts to defend the gaming giant are likely helping out.
- While admitting Battlefield 4's game engine needs to be fixed, Piper's Michael Olson deems it unlikely EA's efforts have pulled in teams working other projects, and believes Battlefield 5 will ship in FY15 (ends March '15). Moreover, though he's only assuming 10M Battlefield 5 shipments for FY15 (compared with 13M Battlefield 4 shipments for FY14), Olson thinks EA can deliver more than $4.3B in FY15 revenue (consensus is at $4.23B).
- Pac Crest's Evan Wilson is more cautious. He argues Battlefield 4's disappointing initial sales, lukewarm reviews, and bugs have "lessened the value of the Battlefield franchise and the probability that it can indeed knock Call of Duty (ATVI +1.9%) off its perch." He also thinks they put into question "EA’s decision to standardize on the Frostbite [game] engine."
- Also: EA has launched iOS/Android games for its popular Heroes of Dragon Age strategy combat franchise. Like other EA mobile titles, the games are free to download, and monetized via in-app purchases.
ATVI vs. ETF Alternatives
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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