Activision Blizzard Inc. (ATVI) is set to launch a new video game featuring the iconic super hero “Spider Man” in the summer of 2012. Developed by well known game studio Beenox, the new game bears the same title “The Amazing Spider-Man” as Sony Entertainment’s upcoming “spidey” flick.
The new installment narrates the post-movie adventures of Peter Parker based on the stories written by Seamus Kevin Fahey, a well-known Hollywood writer. The game features web rush mechanic technology, which allows players to show a host of new moves in the game.
Although Spider Man remains one of the most illustrious comic-book characters developed by Marvel Entertainment LLC, a subsidiary of The Walt Disney Company (DIS), its video game adaptations have received mixed reviews. Analysts believe that Spider-Man 2, developed by Treyarch (the team now responsible for Call of Duty titles), released way back in 2004 was the best Spider-Man game ever made.
Activision has released a number of other titles such as Web of Shadows, Friend or Foe, and Battle for New York over the last few years. Shattered Dimensions, released in 2010, received good reviews, notching up a metacritic score of 76. This year, the company released Spider-Man: Edge of Time, which received dismal reviews from critics (57 metacritic score).
Although both the games were developed by Beenox, Edge of Time was different in many aspects from Shattered Dimensions. The game lacked web-slinging elements as well as action, which are considered essential for Spider-Man games, and failed to generate much fan following. Activision, however, claims that the free-roaming web-slinging features will return in the new game, and this will definitely increase its attraction, in our view.
However, we believe that the franchise will continue to face stiff competition from another comic-book hero Batman whose latest installment Arkham City, released in October 2011 won rave reviews (94 metacritic score).
Recommendation
We believe that Activsion Blizzard’s strong product pipe line and expansion into the online digital segment will help to drive the top line.
However, Activision continues to face tough competition from Electronic Arts Inc. (ERTS) and Take-Two Interactive Software Inc. (TTWO), which will act as a headwind going forward. Moreover, the company’s limited presence in the mobile and social gaming space will be a constraint.
In the long run, we maintain our ‘Neutral’ recommendation. We currently have a Zacks #2 Rank for Activision Blizzard Inc., which implies a ‘Buy’ rating in the short term (1-3 months).
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