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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, Dec. 12, 10:39 AM
- Though Activision's (ATVI -1.5%) Call of Duty: Advanced Warfare was (as expected) #1 in NPD's November U.S. physical retail game sale rankings, Call of Duty franchise sales were down 27% Y/Y and Activision's total sales down 22%.
- That has led Piper to slash its Activision target by $3 to $24. "Strength in the Blizzard side of the business (WoW & HearthStone) should allow for an in-line Q4, but we are slightly lowering our estimates to now be in-line with company guidance."
- Take-Two (TTWO +3.3%), meanwhile, has rallied towards its 52-week high after Grand Theft Auto V (recently become available on the Xbox One, PS4, and PCs) ranked #2. NBA 2K15 was #8, down one spot from October. Borderlands: The Pre-Sequel fell out of the top-10.
- Electronic Arts' (EA +0.5%) Madden NFL 15 rose four spots to #4, but FIFA 15 fell out of the top-10. BofA/Merrill has hiked its targets (I, II) for both EA and Take-Two following NPD's numbers: It's optimistic EA can continue growing margins thanks to growing digital sales and cost controls, and argues Take-Two deserves a multiple similar to EA and Activision's.
- NPD estimates total U.S. physical game sales fell 2% Y/Y in November to $1.09B, a much smaller drop than October's 27%. With next-gen consoles having launched a year ago, hardware sales fell an estimated 23% to $1.01B, with the Xbox One (1.2M sales) outselling the PS4 following a $50 early-November price cut.
- Wedbush's Michael Pachter thinks game sales growth may have been positive after accounting for downloads and the frequent bundling of games with consoles. Meanwhile, Superdata Research estimates total digital game spend rose 23% Y/Y during the Thanksgiving period.
Thu, Nov. 20, 12:06 PM
- After announcing yesterday afternoon World of Warcraft: Warlords of Draenor had sold 3.3M+ copies following 24 hours of availability, Activision (NASDAQ:ATVI) announced today Call of Duty: Advanced Warfare (launched on Nov. 3) "is the biggest entertainment launch of the year, besting not only all other video games, but also the biggest movies, music and books launched in 2014."
- Activision adds Advanced Warfare is " the highest-selling digital launch in console history according to Xbox Live, PlayStation Network and internal Activision estimates," and that users played an estimated 370M+ online matches in the week following the game's release.
- Also: Activision says the company has settled a class-action suit related to last year's leveraged recap deal with Vivendi. "Various defendants" and insurance companies will pay $275M.
- Piper (Overweight) thinks the Warcraft and Call of Duty announcements suggest upside to Q4 estimates.
Fri, Nov. 14, 5:35 PM
- After coming in at #1 in NPD's September U.S. retail video game rankings (following a blockbuster Sep. 9 launch), Activision's (NASDAQ:ATVI) Destiny fell to #5 in October. Take-Two's (NASDAQ:TTWO) NBA 2K15, which launched on Oct. 7, took its place at the top.
- Borderlands: The Pre-Sequel, launched by Take-Two on Oct. 14, was #4. Skylanders Trap Team, which Activision released on Oct. 2, was #6.
- Electronic Arts' (NASDAQ:EA) FIFA 15 and Madden NFL 15 were #7 and #8, down from #3 and #2 in September. The Sims 4 fell out of the top-10, as did Activision's Diablo III: Reaper of Souls.
- Altogether, NPD estimates U.S. physical retail game sales fell 27% Y/Y to $350.3M. They were down 36% in September, thanks in part to tough comps caused by last year's GTA V launch. Xbox One/PS4 demand led console sales to rise 59% to $273.6M; Microsoft cut One prices by $50 early in November.
- The digital transition continues: SuperData Research estimates U.S. digital game spending rose 12% Y/Y in October to $957M.
- Activision's Call of Duty: Advanced Warfare launched on Nov. 3, and should be at or near the top of NPD's November rankings. Metacritic gives the game a score of 77/100.
- ATVI -1.2% in regular trading. TTWO +2.5%. EA +0.1%.
Wed, Nov. 5, 9:16 AM
- Gainers: CRTO +19%. JIVE +17%. YOD +16%. TTPH +12%. IBIO +11%. AEZS +9%. EXEL +8%. CLNY +7%. ANR +7%. ROYT +7%. EOG +6%. PHMD +6%. NICE +6%. VPCO +6%. ATVI +5%. VG +5%. CTSH +5%. WLT +5%. MACK +5%.
- Losers: CHUY -24%. NUS -22%. FEYE -16%. ZU -14%. TRIP -13%. SSYS -8%. MEMP -7%. NG -6%. ANV -6%. ARIA -6%. AWAY -6%.
Fri, Oct. 17, 1:55 PM
- With last year's Grand Theft Auto V (TTWO +0.3%) launch skewing comps, NPD estimates U.S. physical retail video game sales fell 36% Y/Y in September to $481.2M, a worse decline than August's 21% drop.
- The ongoing spending shift towards digital channels naturally contributed to the drop as well: SuperData Research estimates digital game spend rose 8.6% Y/Y in September to $873M.
- Hardware spend rose 136% Y/Y (up from August's 116%) thanks to next-gen console demand: NPD thinks PS4 sales nearly tripled from August levels with the help of Sony's (SNE +1.8%) Destiny bundle, and outpaced Xbox One sales yet again. GameStop (GME +2.7%) investors approve of the numbers.
- Electronic Arts (EA +4.5%) is rallying after Madden NFL 15, FIFA 15, NHL 15, and The Sims 4 respectively came in at #2, #3, #6, and #8 on NPD's top-10 list. Of the four games, only Madden was on the August list (#1 in its launch month). Battlefield 4 (#9 in August) fell out of the top-10.
- As expected, Activision's (ATVI -0.5%) Destiny was #1. But Diablo III: Reaper of Souls fell to #10 from #2, and Call of Duty: Ghosts (#5 in August) dropped out of the top-10. Activision, like Take-Two, is sitting out a market rally.
- EA reports on Oct. 28, Take-Two on Oct. 29, Sony on Oct. 31, and Activision on Nov. 4.
Fri, Aug. 29, 11:29 AM
- Take-Two (TTWO +4.1%) president Karl Slatoff says his company is weighing the pros and cons of bringing Grand Theft Auto to the big screen. He adds Take-Two doesn't think a weak box office showing would hurt the GTA game franchise.
- Dan Houser, the co-founder of GTA developer Rockstar Games, also appears open to doing a GTA movie. However, he insists Rockstar would want to make the film on its own.
- Benchmark's Mike Hickey thinks a GTA film makes sense, and that it could compel Activision (ATVI +0.3%), rumored to be hatching plans for its own movie studio, to acquire Take-Two.
- Hickey calls an Activision/Take-Two deal a "no-brainer," given Take-Two's developer talent, IP, and low valuation. He notes Activision can lower its business volatility by staggering Rockstar, Bungie, and Blizzard releases, and that Take-Two could help offset World of Warcraft's ongoing decline and Skylanders competition from Disney.
Tue, Aug. 5, 5:55 PM
- Activision (NASDAQ:ATVI) expects Q3 revenue of $975M and EPS of $0.11 vs. a consensus of $893.3M and $0.13. Full-year guidance (a little harder to project) is for revenue of $4.7B and EPS of $1.29, slightly below a consensus of $4.71B and $1.31.
- Revenue from digital channels grew 26% Y/Y in Q2 to $481M, overshadowing a 41% drop in retail channel revenue to $111MM. Distribution channel revenue grew 78% to $66M.
- Console revenue fell 18% Y/Y to $201M, but PC revenue rose 201% to $131M (boosted by Diablo III). Online rose 4% to $201M. Mobile/other remains a soft spot, declining 34% to $59M; EA had $120M in calendar Q2 mobile revenue.
- The World of Warcraft sub base fell by 800K Q/Q to 6.8M; the decline was "disproportionately concentrated in the East." That could be a negative for Chinese WoW partner NetEase (NASDAQ:NTES).
- GAAP costs/expenses +6% to $660M. Activision notes Call of Duty: Ghosts remains the top-selling game on next-gen console in North America and Europe combined.
- Q2 results, PR
Fri, Jul. 18, 2:07 PM
- After rising 57% Y/Y in May due to new game launches, U.S. retail physical game sales fell 3% in June to $286.8M, per NPD. But with June 2013 having a stronger launch title lineup, that figure was better than expected. Sales were also still up over 4% from a May level of $274M.
- Ubisoft's (OTCPK:UBSFY) Watch Dogs was the top-selling title for the second month in a row. Electronic Arts' (EA +3.1%) UFC (launched on June 3) was #4, and FIFA 14 (receiving a World Cup boost) was #5. Titanfall (#8 in May) fell out of the top-10.
- Activision's (ATVI +1.2%) Call of Duty: Ghosts rose 2 spots to #8. But The Amazing Spider-Man 2 (#6 in May) dropped out of the top-10.
- Take-Two's (TTWO +4.1%) NBA 2K14 (boosted by playoff interest) rose a spot to #6, and GTA V came in at #10. Nintendo's (OTCPK:NTDOY) Mario Kart 8 and Tomodachi Life were respectively #2 and #9.
- With the help of Microsoft's cheaper Xbox One package, hardware sales rose 106% Y/Y to $292.7M. Together with the software numbers, that's providing a lift to GameStop (GME +4.4%).
- EA reports on July 22, while Activision and Take-Two both report on August 5.
Tue, Jun. 17, 1:59 PM
- Thanks to new game launches, U.S. retail physical game sales (just a subset of total game sales) rose 57% Y/Y in May to $274M, says NPD. That represents a big turnaround from April's 10% drop, and March's 27% decline.
- Ubisoft's (UBSFY) Watch Dogs, which sold 4M units worldwide in its first week, was the top-selling title. After holding the top spot the last two months, Electronic Arts' (EA +2.9%) Titanfall fell to #8.
- Activision's (ATVI +1.7%) The Amazing Spider-Man 2 was #6, up two spots from April, and Call of Duty: Ghosts was #10 (down from #2). Take-Two's (TTWO +3.6%) NBA 2K14 was #7 (down from #3).
- EA and Activision are making fresh 52-week highs. Take-Two isn't far removed from its 52-week high of $22.41.
Tue, May. 6, 5:38 PM
- Activision (ATVI) has hiked its 2014 revenue guidance by $75M to $4.675B (consensus is at $4.65B), and its EPS guidance by a penny to $1.27 (consensus is already at $1.29).
- Digital channel revenue (68% of total) rose 23% Y/Y in Q1 to $527M; retail channel revenue fell 47% to $172M; distribution revenue rose 43% to $73M.
- Console revenue fell 40% Y/Y to $150M, but PC revenue rose 98% to $239M (strong Diablo III sales). Online revenue (inc. World of Warcraft and Call of Duty Elite) was flat at $227M, and mobile/other revenue fell 47% to $83M (lower Skylanders toy sales?).
- Asia-Pac sales soared 67% Y/Y to $105M, and helped drive the EPS beat. North America -22% to $330M, Europe +6% to $337M.
- The company lost 200K World of Warcraft subs; the base now stands at 7.6M. Diablo III was the top-selling PC title on a dollar basis in North America and Europe. R&D spend +14% to $143M, sales/marketing spend -3% to $104M.
- Shares have pared their gains: ATVI +1.5% AH. Q1 results, PR.
Tue, May. 6, 4:10 PM| Comment!
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.
Thu, Feb. 6, 4:27 PM| Comment!
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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