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Activision Blizzard: Recent Slide Is A Great Buying Opportunity

Gary Alexander profile picture
Gary Alexander


  • Shares of Activision Blizzard have dipped nearly 15% over the past month.
  • Investors have cited concerns over a recent labor dispute.
  • In addition, Netflix's proposed entry into the gaming space is causing renewed jitters.
  • I continue to view Activision Blizzard to be an attractive stock with huge, recurring-revenue franchises like Call of Duty to bank on.
  • The company is due to report earnings after market close on August 3.
  • I do much more than just articles at Daily Tech Download: Members get access to model portfolios, regular updates, a chat room, and more. Learn More »

E3 Gaming Conference Begins In Los Angeles
Kevork Djansezian/Getty Images News

One of the stubborn red marks in my portfolio lately has been Activision Blizzard (NASDAQ:ATVI). A winner of the pandemic era that saw interest in its games skyrocket last year, Activision Blizzard has followed up on

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This article was written by

Gary Alexander profile picture
With combined experience of covering technology companies on Wall Street and working in Silicon Valley, and serving as an outside adviser to several seed-round startups, Gary Alexander has exposure to many of the themes shaping the industry today. He has been a regular contributor on Seeking Alpha since 2017. He has been quoted in many web publications and his articles are syndicated to company pages in popular trading apps like Robinhood.

Analyst’s Disclosure: I/we have a beneficial long position in the shares of ATVI either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (18)

@Gary Alexander Where do you rate fair value?
Dan Naumov profile picture
The main problem with World of Wacraft is that almost nobody in charge seems to be actually actively playing the game. Their design choices make no sense whatsoever to anybody who's playing the game a lot, but make total sense if all you do is log on every Saturday to run a few 5-man dungeons with your wife.
You guys don't understand the customers or culture here, and it shows. It's not just the big sexual misconduct lawsuit from California. Blizzard fans are extremely disgruntled and Blizzard's reputation has been sliding hugely for years. The quality of the games has been poor recently, the company has been hostile to the fans, and most of the talented developers who built the Blizzard empire have left the company. Shadowlands and Burning Crusade Classic sold well initially, but there's been a big drop-off in players, again due to poor quality and increasingly manipulative monetization. Multiple prominent streamers who have played for 15 years+ have left to play other games and publicly bashed wow. Diablo IV won't be out for years, OW2 is questionable now that Kaplan is gone, and WoW has been in a long decline. What else do they have, remakes of 1990s games? Blizzard is a melting icecube and people are starting to realize it. I know that CoD and Candy Crush are the big money makers, but Blizzard is going to drag things down if it doesn't turn around in a big way quickly.
Orangejulius profile picture
Fan of Blizzard's old days here. Been playing their games since the original Warcraft.

I agree that Blizzard's reputation has been suffering, and not just for the past several years, but the past decade. Sometime around the release of Diablo 3 in 2012, the companies' focus faltered and fans love affair with the games came into question. More and more focus on mobile games alienated the fanbase, failed remaster of WC3, efforts at monetization, etc.

It reminds me of what happened to Bioware when they were acquired by EA. Founders and longtime leaders left, product quality sank, consumers revolted.

There's plenty of time to turn the Blizzard side of the business around. It truly believe they have a stellar lineup of IPs. They badly need to fix the culture, because tolerating (former) employees like Alex Afrasiabi led to a bad work environment. That kind of harassment leads to serious repercussions.
Stuart_S profile picture
On Glassdoor, ATVI gets 3.6 stars; 61% would recommend it and 61% approve of the CEO. The corresponding figures for EA are 4.0, 84% and 92%. For TTWO, the figures are 4.5, 95, and 99.
I’ve been playing Call of Duty. Have followed gaming for sometime now. I don’t believe this is more than a momentary downhill. Warzone is something that no-one else has.
Not sure if anybody else have played blizzard games or your views come from a more investor perspective. I’ve been an active player and investor of ATVI, with 50% is coming from the blizzard side…I have concerns.

The recent labor lawsuit brings to light an under current that I’ve been noticing. Management has had an active hand in many of the products and they have suffered. Production delays and non compelling products have pushed users elsewhere for a better products.

Without leaders like Metzen and Morhime, Blizzard’s crack are starting to show. I anticipate a mass brain/ creativity exodus and future blizzard products will suffer

I’ve started to reduce my positions the past few months before the lawsuit.
Et20 profile picture

I played most of Blizzard's games most notably Wow (Vanilla wow plus 4 expansions)
Thomas Mazzarino profile picture
@BioNoob The upcoming pipeline for Blizzard is compelling - Overwatch 2 and Diablo 4. Also, most revenues come from Activision and the Warzone bucks will continue to roll in for years most likely.
Dan Naumov profile picture
@Thomas Mazzarino literally nobody from the target audience wanted or asked for Overwatch 2. It's a pure cashgrab that only surves to alienate them even further.
Of course ATVI might become the next Ubisoft (lambasted for its excessively male environment and repeated delivery postponements) and go on to frustrate investors for years. But with brokers reiterating TPs at c $125, this looks an opportune entry point with good potential.
a_zaks profile picture
@B'n'B "But with brokers reiterating TPs at c $125, this looks an opportune entry point"

@a_zaks TP = Target Price
Et20 profile picture
Activision has been suffering from a string of PR melt downs and stalled game development which is why the share price cratered. Most of their issues are internal. The California lawsuit for now is just a distraction whilst Netflix is the least of their worries.

Called it back on the 25th

Benjamin Graham Cracker profile picture
No doubt, the allegations are unsavory and people involved should be punished. Doesn't hurt to clean up culture. Perhaps there's more management is hiding, but the returns, so far, speak for themselves.

This is an opportunity to buy a quality business that's now dipping into value-stock territory in terms of valuation.

Twitter has its tantrums, and employees are having their say. It'll get sorted.

But the hysteria on Twitter and from overly emotional investors on this site is a thing to behold. No one will play Call of Duty? What was traffic like on the day of the "blackout"? Never great when employees walk out...for every engineering job or game programmer/tester position at ActivisionBlizzard, there are 1,000 hungry applicants waiting in the wings to take that job -- no doubt in my mind.

These hysterias are no different thatn Target's bathroom policy, the Starbucks debacle, and on and on. All proved to be excellent buying opportunities.
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