Activision Blizzard Stock at All-Time High (ATVI); Predicts Sharp 2014 Decline

Written by  Friday, 07 February 2014 18:43
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It seems that both the gaming and hardware industries are in good health, given our recent reports on record-high game industry revenue and AMD's surge in net revenue. Adding to the gaming world's boom is Minecraft's success, which has placed it in the top two most-selling games ever (or first, depending on how you count it). Today, Activision Blizzard (NYSE: ATVI) welcomed record-high share prices after its Thursday afternoon investor meeting, despite an overall negative outlook on 2014.

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Activision Blizzard is the conglomerate game studio formerly housed by Vivendi, and up against EA, can easily be claimed as (one of) the most influential gaming companies of the era. The group is responsible for producing some of the world's most popular games -- World of Warcraft, Call of Duty, StarCraft II, even Skylanders on the kid's games front, and remains famous for older games, like the Tony Hawk's Pro Skater series, Crash Bandicoot, Guitar Hero, and Spyro.

 

ATVI shares climbed to $19.95 briefly today, marking ATVI's split-adjusted all-time record high, beating out a previous high of $19.30 (S&P Capital IQ; JUN 2008). The stock settled at $19.64 upon market close, marking a 14.39% gain ($2.47) over the course of the last 24 hours. ATVI reported Thursday that its revenue has increased 3% this quarter, raising Activision Blizzard's revenue up to $2.27B from $2.22B; the company's per-share profit has increased 9.27% (72c per share to 79c per share), but is predicted to decline to 76c per share in 2014.

To give an idea of the company's assets, StarCraft II's Heart of the Swarm shipped 1.1 million copies within 48 hours of launch; this is against the original StarCraft II's (2010) 1.8 million sales within 24 hours. HOTS performed admirably for an expansion pack, reaching nearly half of its predecessor's sales within the same time period. Specific all-time sales numbers for HOTS were not released, but are undoubtedly lower than StarCraft II: WOL's "more than 6 million" all-time copies sold, as of a June 2013 report.

Despite harsh reception (including vitriol from our own site), Diablo III was reported as selling 15 million copies in the post-earnings financial call yesterday.

Bobby Kotick, Activision Blizzard CEO -- who is unfortunately still in the games industry -- called 2013 "a transformational year" for the company, pointing out its separation from former governing body Vivendi.

Kotick further focused on free-to-play titles, driving home that "free-to-play as a business model now has achieved scale, both in the West and in China." The CEO went further to underscore Hearthstone, Heroes of the Storm, and "Call of Duty Online," all impending or released F2P titles.

Kotick also claimed that StarCraft II: Heart of the Swarm was the #1 selling PC game of 2013, though our research has proved that this is potentially incorrect; from what we've found, Minecraft seems to hold the title for #1 selling PC game of 2013, ranked at nearly 5 million sales between January, 2013 and January, 2014 (14 million total PC copies shipped).

One of Activision Blizzard's most profitable franchises, believe it or not, is Skylanders, now passing more than $2B in lifetime sales of both toys and software. World of Warcraft still brings in significant revenue though, with 7.8 million active subscribers - an increase of 200,000 over the last three months.

Activision's 2014 outlook indicates a sharp sales decline on a GAAP basis, from $4.58B in revenue to a projected $4B in revenue.

Source: http://investor.activision.com/

- Steve "Lelldorianx" Burke.

Last modified on Friday, 07 February 2014 18:47

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