Activision Blizzard ATVI recently announced the release of World of Warcraft: Wrath of the Lich King. Players who already have a subscription to World of Warcraft (WoW) can now use it for free.
This second edition of WoW is an iconic adventure from Azeroth history that takes players through lush locations, fight enemies and complete numerous missions before confronting the iconic Lich King in Icecrown Citadel.
This Wrath of the Lich King expansion carefully balances between the nostalgia for veteran players and the modernization needed for new players. This has sparked excitement among players, which can fuel the user base for Activision.
Activision Blizzard Expands Its Gaming Portfolio
Aside from WoW, Activision is also getting massive traction from its Call of Duty. It recently revealed the future of its franchises, which is expected to boost its sales.
Call of Duty: Modern Warfare II, a sequel to Modern Warfare 2019 and Call of Duty: Warzone 2.0, with new features such as extraction mode, gulag changes and new swim/water combat, will be released on October 28 and November 16, respectively.
Activision will also launch Call of Duty: Warzone Mobile in 2023, a free-to-play battle royale mobile game with up to 120 players, allowing them to share social features such as friends and chat channels.
This portfolio expansion from Activision is further bolstered by the fourth installment in the Diablo series, as Diablo IV is also set to be in 2023. The title will support cross-play and cross-progression across platforms and will also enable live service and ongoing storytelling.
Activision Blizzard, Inc Price and Consensus
Activision Blizzard, Inc price consensus chart | Activision Blizzard, Inc Quote
Activision’s strong portfolio makes it an attractive investment. The company will be acquired by Microsoft MSFT for $95 per share in a cash transaction.
Activision shares are up 11.7% this year versus the Zacks consumer goods sector, which fell 39.8% over the same period.
However, the acquisition is facing an in-depth investigation in the UK as the Competition and Markets Authority believes the acquisition could hurt competition in game consoles, subscription services and cloud gaming if Microsoft refuses to allow competitors access to Activision’s best-selling games. .
headwind
Activision’s reliance on a handful of its franchises, namely Call of Duty, World of Warcraft, Overwatch, and King Digital’s Candy Crush, which make up more than 82% of its revenue, poses a risk.
Activision expects costs to rise in the near term as the company seeks to deliver franchises faster than expected to support topline results.
This Zacks Rank #3 (Hold) Company Faces Fierce Competition From Electronic art EA and Take-Two Interactive TWO.
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Shares of Electronic Arts are down 12.9% so far. The upcoming Madden NFL 23 and the most comprehensive FIFA game will bolster EA’s portfolio. The company expects net bookings for fiscal year 2023 in the second quarter to be $1.725-$1.775 billion.
Take-Two Interactive’s share has fallen 38.3% so far. Sales are driving strong revenues from GTA and Red Dead Redemption, as well as from the acquisition of Zynga, making TTWO one of the largest mobile game publishers. The company expects revenues to grow 73.3% year over year in fiscal 2023.
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