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Activision Blizzard, Inc (ATVI)

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  • Jan. 17, 2014, 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
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  • Jan. 14, 2014, 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.
    | 5 Comments
  • Jan. 7, 2014, 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%.
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  • 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.
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  • 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.
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  • Dec. 5, 2013, 11:44 AM
    • With complaints about bugs and connectivity issues piling up for Electronics Arts' (EA -7.3%) recently-launched Battlefield 4, EA's DICE unit (responsible for developing the game) is halting the release of additional Battlefield 4 expansion packs, and is also stopping work on all "future projects," until the game's issues are sorted out.
    • EA investors aren't responding well to the news. Without healthy sales of Battlefield 4 and its $50 premium service, EA could struggle to hit its Dec. quarter forecasts. Moreover, DICE's project halts could delay the release of two anticipated titles: Star Wars: Battlefront (due in 2015) and Mirror's Edge 2 (due in 2015/2016).
    • Activision (ATVI -2%), whose mainstay Call of Duty franchise is the top rival to EA's Battlefield franchise, is also selling off.
    | 14 Comments
  • Nov. 15, 2013, 2:20 PM
    • After rising 52% Y/Y in September on the back of huge sales for Take-Two's (TTWO -0.2%) Grand Theft Auto V, NPD estimates U.S. physical retail video game sales only rose 12% Y/Y in October ahead of this month's PlayStation 4 (launching today) and Xbox One (launching on Nov. 22) debuts. GTA V was once more the bestselling title.
    • GameStop (GME -2.2%) is selling off on the wake of NPD's numbers, and so is Electronic Arts (EA -5.7%). Investors in the latter might not be pleased Madden NFL 25 (#2 in September and #1 in August) and FIFA 14 (#5 in September) fell out of the NPD's list of the ten top-selling games. EA's Battlefield 4, which launched near the end of the month to muted reviews, came in at #4.
    • Take-Two's NBA 2K14 (#3 in September) and WWE 2K14 respectively came in at #7 and #10.
    • Activision's (ATVI - unchanged) Skylanders: Swap Force was #8 on the list. Diablo III, which was #4 in September, dropped out of the top-10.
    • Hardware sales fell 8% ahead of the PS4/Xbox One launches, and only totaled $171.7M. Accessories sales rose 1%.
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  • Nov. 14, 2013, 5:04 PM
    • Three months after announcing a deal to sell back 40M shares to Yahoo (YHOO) and thereby bring its total stake in the company down to 20M, Dan Loeb's Third Point LLC discloses it owned 16M Yahoo shares at the end of Q3. That translates into a 1.6% stake in the company whose shares have soared over the last 12 months thanks to Alibaba IPO hopes. (13F)
    • Third Point's Nokia (NOK) stake only amounted to 2M shares (current value of $15.8M) at quarter's end. Nokia rallied on Oct. 22 after Loeb disclosed he had taken a position, and provided his reasons.
    • The firm's position in Tibco (TIBX) was pared to 4.425M shares (2.7% stake) from a prior 5M. There's ongoing speculation Loeb will make Tibco an activist target.
    • A new 2.6M-share position was taken in Activision (ATVI), which just finished a massive leveraged recap deal with Vivendi.
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  • Nov. 6, 2013, 4:11 PM
    • Activision Blizzard (ATVI): Q3 EPS of $0.08 beats by $0.05.
    • Revenue of $657M (-13% Y/Y) beats by $67.6M.
    • Expects Q4 revenue of $2.22B and EPS of $0.72, below a consensus of $2.29B and $0.79.
    • Shares +1.5% AH. (PR)
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  • Nov. 6, 2013, 3:35 PM
    • Ahead of this afternoon's Q3 report, Activision (ATVI +0.2%) discloses it has sold $1B worth of copies of Call of Duty: Ghosts "into retail stores," and that "millions of people" are playing the game online. (PR)
    • Last year, Activision announced sales of Call of Duty: Black Ops II topped $1B within 15 days. But in that instance, the company was measuring sell-through to users rather than retail sell-in.
    • Strong sales were expected for Ghosts, which has received good-but-not-great reviews. Activision monetizes the Call of Duty franchise both through game sales and subscriptions to online services.
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  • Nov. 6, 2013, 12:10 AM
  • Nov. 5, 2013, 5:35 PM
  • Oct. 21, 2013, 10:04 AM
    • SolarCity (SCTY +7.3%) has been started at Buy by BofA/Merrill.
    • Salesforce (CRM +2.1%) has been upgraded to Strong Buy by Raymond James.
    • Activision (ATVI +1%) has been started at Overweight by Barclays.
    • MA-Com (MTSI +2.7%) has been upgraded to Overweight by Stephens.
    • Russian carriers VimpelCom (VIP -0.5%) and MTS (MBT -1.8%) have been cut to Hold by Deutsche, and so has Aixtron (AIXG +3.2%)
    • NII Holdings (NIHD -4.3%) has been cut to Underperform by Credit Suisse.
    • Celestica (CLS -1.4%) has been cut to Hold by Canaccord.
    • Aruba (ARUN +1.7%) has been started at Outperform by Northland.
    • Applied Optoelectronics (AAOI +10.9%) has been started at Strong Buy by Raymond James.
    • Xoom (XOOM +6.9%) has been started at Buy by SunTrust.
    • Montage (MONT -0.4%) has been assigned five bullish ratings, and no neutral/bearish ones, on underwriter coverage day.
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  • Oct. 18, 2013, 11:15 AM
    • Thanks to Grand Theft Auto V's (TTWO -0.6%) blockbuster launch, U.S. retail physical video game sales rose 52% Y/Y in September to $754M, per NPD (or +40% if one includes PC game sales). Sales were up 21% in August after falling 19% in July.
    • GTA V, whose global retail sales topped $1B within three days of its Sep. 17 launch, single-handedly accounted for over half of NPD's September figure. Electronic Arts' (EA +0.6%) Madden NFL 25 was #2 on NPD's bestseller list after coming in first in August, and FIFA 14 was #5. Take-Two's NBA 2K14 was #3, and Activision's (ATVI -1.1%) Diablo III was #4.
    • Hardware sales -13% Y/Y to just $183M ahead of the Xbox One/PS4 launches. Accessories +2% to $142M. GameStop (GME +1.5%) is higher after initially trading near breakeven.
    • NPD also reports U.S. digital game revenue rose 6% Y/Y to $970M, albeit with a mix shift away from traditional fare. Downloadable content sales for console-type games fell 23% to $198M, and subscription MMOs (such as Activision's World of Warcraft) lost 300K subs.
    • However, mobile game sales rose 14% to $266M, social games rose 16% to $176M, and free-to-play MMOs such as EA's Star Wars: The Old Republic added 700K users. That first two figures spell bigger addressable markets for Zynga (ZNGA +1.8%) and Glu (GLUU +4.1%), respectively; each has lost some share this year.
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  • Oct. 11, 2013, 4:33 PM
    • A day after Delaware's Supreme Court cleared the way for the deals to proceed, Activision (ATVI +0.2%) says it has closed its $5.83B, $13.60/share leveraged recap deal with Vivendi (VIVHY.PK), and that Vivendi's sale of $2.34B in shares (also at $13.60/share) to an investment group led by Activision's CEO and co-chairman has also been finished. (PR)
    • Not surprisingly, Activision predicts the leveraged recap, which was financed via $4.75B in debt (average interest rate below 5%) and $1.2B in existing cash, will be immediately accretive to EPS.
    • The two deals leave the investment group, which also features private investment firms and Chinese online gaming giant Tencent (TCEHY.PK), with a 24.7% stake in Activision. Vivendi retains a 12% stake.
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  • Oct. 10, 2013, 2:35 PM
    • Delaware's Supreme Court has overturned a September lower court ruling requiring Activision (ATVI +3.8%) to put its $5.8B leveraged recap deal with Vivendi and the $2.3B purchase of Vivendi-owned Activision shares by the company's CEO and co-chairman to a shareholder vote.
    • The deal, which (judging the market's reaction to the initial announcement) would likely have been overwhelmingly approved by shareholders, is now free to move forward without a vote.
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Company Description
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.