The company's Consumer Products Group makes its official debut, building on plans the company has discussed around its individual properties previously. The company has partners including Bioworld, Mattel, McFarlane Toys, Razer and Otterbox making related products.
In Call of Duty, along with the release of the latest iteration of that war shooter this November (Call of Duty: WWII), Activision has a $4M prize pool for its e-Sports competition Call of Duty World League, and continues to work on a film franchise.
Netflix has ordered a third season of Skylanders Academy (based on the toys-to-life business) for 2018; its second season debuts later this year.
On the Blizzard side, an Overwatch e-Sports league is on the way, and Blizzard games have merchandise partners including Good Smile, Dark Horse and Tokidoki.
At King, Candy Crush Saga licensing is doing well in food (confectionary, chocolate, and ice cream), and a live-action TV game show is coming this summer on CBS.
Videogame sales grew for the second straight month -- the first time that's happened since November 2015.
Overall sales increased 10%, to $636M, the second straight increase after nine straight Y/Y declines, according to NPD Group. Hardware sales again led the way, up 37% to $195M, thanks to the Nintendo Switch (NTDOY +1.8%).
Switch sales exceeded 280,000 units. Accessories grew 4% to $126M, again with help of sales of the Nintendo Switch Pro controller.
On the software side, videogame software increased 6% to $304M, while PC game software (physical and via Steam) fell 57% to $11M. Cross-platform, videogame sales got a boost from chart-topping debuts form Mario Kart 8 (OTCPK:NTDOY) and Persona 5 (Atlus).
Rounding out the dollar sales chart for software: No. 3, The Legend of Zelda, Breath of the Wild (OTCPK:NTDOY); No. 4, MLB 17: The Show (SNE -0.1%); No. 5, Tom Clancy's Ghost Recon: Wildlands (UBSFY +0.3%); No. 6, Grand Theft Auto V (TTWO +3.1%); No. 7, Mass Effect: Andromeda (EA +1.6%); No. 8, NBA 2K17 (NASDAQ:TTWO); No. 9, Overwatch (ATVI +1.7%); No. 10, Call of Duty: Black Ops II (NASDAQ:ATVI).
Citi lists Netflix (NASDAQ:NFLX) as the top target of Apple (NASDAQ:AAPL) in a fresh note to clients titled "Addressing the Problem of Too Much Cash."
The investment firm thinks a 10% repatriation tax on cash sitting overseas will entice Apple to bring in the M&A firepower to Cupertino.
The other top potential targets for Apple identified by Citi are Disney (NYSE:DIS), Hulu, Activision Blizzard (NASDAQ:ATVI), Electronic Arts (NASDAQ:EA), Take-Two Interactive (NASDAQ:TTWO) and Tesla (NASDAQ:TSLA), with analyst Jim Suva writing that each is a strategic fit in its own way.
The Citi handicapping puts 40% odds on a Netflix buyout, 25% odds on a Disney buyout and the rest at 10% or lower odds. Add you own potential Apple target in the comment stream.
NFLX +0.78% premarket to $158.47. DIS +0.30% to $111.50. EA +1.22% to $95.92. TSLA +0.51% to $296.96.
Activision Blizzard (NASDAQ:ATVI) has fallen 2.1% after hours following Q1 earnings beat expectations and showed solid subscription growth even amid soft results from Call of Duty-focused Activision.
The company had 431M monthly active users: Blizzard hit its high of 41M (up 58%); Activision had 48M, down from last year after softness out of Call of Duty: Infinite Warfare; King had 342M (also down Y/Y). In engagement, Blizzard hit a record there as well, and King's time spend per DAU is 35 minutes/day.
Revenue breakout: Product sales, $509M (down 21.1%); Subscription, licensing and other revenues, $1.22B (up 50.2%).
Net revenues by platform: Console, $615M (down 20%); PC, $566M (up 42%); Mobile and ancillary, $475M (up 95%); other, $70M (up 49%).
Net revenues by segment: Activision, $215M (down 40%); Blizzard, $441M (up 50%); King, $474M (up 129%).
For Q2, the company's guiding to net revenues of $1.43B ($1.2B accounting for GAAP deferrals, vs. consensus of $1.188B) and EPS of $0.38. For calendar 2017, it's boosting guidance to net revenues of $6.1B ($6.33B accounting for GAAP deferrals, light of consensus for $6.41B) and EPS of $1.80.
After months of declines, videogame sales rebounded in March with the help of a new console from Nintendo (NTDOY -1.4%) and some strong game releases.
Overall sales jumped 24% to $1.36B, according to NPD Group, halting a streak of nine straight Y/Y declines in the business. Hardware sales nearly doubled, to $485M, as the Nintendo Switch had the second-biggest launch for any platform in more than 20 years.
Accesories grew 9% to $231M, with Switch accessories making up a quarter of that. An Amiibo character pack tied to The Legend of Zelda: Breath of the Wild made up 43% of spending on interactive gaming toys.
In software, videogame software rose 5% to $612M, and PC game software (physical and via Steam) fell 25% to $29M, leading to total software gains of 2.7%. A set of new releases topped the game charts and spurred sales: Tom Clancy's Ghost Recon: Wildlands (UBSFY +2.6%) debuted at the top of the dollar sales chart, followed by the new Zelda (OTCPK:NTDOY). No. 3 was Mass Effect: Andromeda (EA +1.7%) and No. 4, Horizon Zero Dawn (SNE +2.6%).
The Switch version of Zelda sold more than 900,000 packaged units and Switch packaged software overall sold 1.3M, a record for a Nintendo launch.
The top 10 in software rounded out: No. 5, MLB 17: The Show (NYSE:SNE); No. 6, Grand Theft Auto V (TTWO +2.6%); No. 7, For Honor (OTCPK:UBSFY); No. 8, NBA 2K17 (NASDAQ:TTWO); No. 9, Nier: Automata (Square Enix); No. 10, Call of Duty: Infinite Warfare (ATVI +1.2%).
Activision Blizzard (ATVI +0.5%) is hoping its 2016 purchase King Digital can crush it when it comes to mobilizing its cash-cow franchise.
The company is charging its unit that created the lucrative Candy Crush Saga series with making a new Call of Duty mobile game, hoping King can strike gold where Activision's found only lead before.
There's no timetable for the new game, and King has listed four new jobs to develop it. And if it seems like CoD and King's games are worlds apart, Benchmark's Mike Hickey notes mobile gaming calls for expertise: “Just because on the surface (King's games) appear simple doesn’t mean their inner workings aren’t highly complex.”
At least two current mobile CoD games cost $6.99 to download whereas King has focused on the free-to-play/in-app purchases approach.
Activision Blizzard (ATVI +0.8%) is at new highs today after getting a price target boost from UBS analyst Eric Sheridan, who sees strength from the company's franchises as well as a boost from King Digital.
"Following a solid Q4 print (especially vs. investor fears), Activision has reignited investor confidence with strength in Overwatch, solid King mobile bookings, steady engagement growth for Destiny and a commitment to return Call of Duty to its combat roots while maintaining sales and marketing discipline," Sheridan writes.
The company's managing a shift from a blockbuster approach to more steady revenue streams, he says, as well as dipping toes into newer areas such as e-Sports and consumer products.
Sheridan raised his target to $57 from $48, implying near-14% upside from today's close.
“Activision is fighting the long-term secular decline in packaged games with increased online functionality," says analyst Joseph Bonner. "It is developing expanded, high-margin versions of its franchise games, developing ‘free-to-play’ games for that growing market segment, and introducing new game concepts."
He raised his price target to $53, implying nearly 17% upside.
Activision Blizzard (ATVI -3.2%) has given back some gains after Friday's sharp move up on record earnings, and Hilliard Lyons is one firm that's giving more play to conservative guidance from the videogame maker.
Hilliard's Jeffrey Thomison has cut his rating to Underperform ahead of a "down year," reducing expectations for 2017 EPS to $1.92 from $2.20 (vs. consensus $1.94), and for revenue of $6.33B from $7.2B (vs. consensus of $6.4B).
Activision's own full-year guidance is for $6.3B in revenue and $1.85 in EPS. “While we feel this guidance is conservative, we also believe it reflects maturation of certain console franchises,” Thomison writes.
“In sum, we believe 2017 is shaping up to be a down year for ATVI’s revenues and earnings, while the stock price is at an all-time high and valuation is near the upper end of a historical range. Given that 2018 prospects seem considerably more attractive, we believe better investment opportunities could surface later this year,” he adds.
Activision Blizzard (NASDAQ:ATVI) is up 16.1% to all-time highs after a record Q4 report where the company beat expectations and added a new $1B buyback program along with a higher dividend.
Guidance for the coming year is probably conservative, analysts suggest.
Jefferies analyst Tim O'Shea has one of the most bullish price targets at $55, implying another 19% upside. The company beat despite sales declines at its cash cow Call of Duty franchise; more evidence that initial sell-in isn't as important as before, he says.
The company has tough 2017 comps in Blizzard, says UBS analyst Eric Sheridan, but a positive ramp is coming with a new Destiny in September, and a return to form for Call of Duty could provide second-half growth as well. He's boosted his price target to $48 from $45.