Activision Blizzard continues to bring in good news. They received an upgrade from the street on last Wednesday. Here’s what they got to say: “Activision Blizzard has gained 18% during the past year, trailing major benchmarks. The stock trades at a price-to-book ratio of 1.4 and a price-to-sales ratio of 3.4, 73% and 48% discounts to peer averages. It’s also cheap based on projected earnings.” Link. – http://www.thestreet.com/_yahoo/story/10731104/1/honda-activision-mt-ratings-upgrades.html
World of Warcraft continues to make them millions of dollars. They must have the best marketing/sales/product team in the industry. In the past week, they created a new horse called the ‘Celestial Steed.’ They charged WoW players $25 to buy it. In just four hours, they made over $2 million dollars off it. It must have took the designer maybe 1-2 days to design the 3D horse model. Even if it took him a week, they still made tons more than the price to pay the designer to create it. I’m sure Activision will continue to find ways to monetize their games. It’s definitely a model that will be built into future gaming.
They also have a few big hits coming out at the end of the year. Star Craft II is planned to be released in the late summer or fall. Disablo III is planned to come out early next year. The next expansion to World of Warcraft is set to be released for the holidays. There’s still plenty of time to get in before all the action happens, but you can bet the second half of 2010 will be big for the company.
Gamestop is already selling pre-orders for Starcraft II. If you are an avid gamer, you can get into the beta just by pre-ordering the game. They will give you a beta key to start warming up your keyboard touches and mouse clicks. It has already been a hit on Amazon as a ‘Bestseller’ being ranked in the top 200 sellers in video games. They also still have Call of Duty: Modern Warfare 2 making tons of cash. It got recently rated ‘Best Successful Launch in Video Games’ by making over $400 million within one day. It surpassed Grand Theft Auto which had the record at over $300 million.
What can they do for the early part of 2010?
I’d hope they have started creating games for the iPad and moved into the mobile phone field. You can bet Electronic Arts is establishing themselves in these fields after lackluster sales from their console games. Activision has to continue to make strong games that sell. Short-term the outlook is cloudy, but the stock charts have shown strong support to keep the price up. Long-term this stock is a keeper. You have the most popular computer games being released from Blizzard. They will all sure be hits when they come out.
Let’s see what the earnings say on May 6th.
Disclosure: I’m in ATVI and I have puts in ERTS
