Activision Blizzard Inc. (ATVI) recently launched a series of games to boost sales in the pre-holiday season and reach a larger number of fans. The most recent game to hit the stores was Generator Rex: Agent of Providence, which is based on a popular TV series.
In the game, Rex Salazar, the hero, controls the mutation making "Nanites" that make him a valuable member of Providence and clash with the enemies in environments such as the underwater world of Aquania and the private dimension of the nefarious Breach.
During these encounters, gamers have the option of meeting Rex's allies Bobo Haha, Agent Six and Providence's leader, the White Knight. The level-specific challenges and the main campaign are set to enthrall the gamers in every way.
Activision, in association with Cartoon Network Enterprises, has developed the game, which is a classic combat and action game that is available on Microsoft Corp.’s (MSFT) Xbox 360, Sony Corp.’s (SNE) PlayStation3 and Nintendo’s 3DS.
Also recently, Activision launched two new adventure games back-to-back, namely Survival: Shadows of Katmai, in partnership with Cabela’s, and James Bond classic thriller GoldenEye 007: Reloaded.
Additional titles, such as Call of Duty: Modern Warfare 3, which is scheduled to release on November 8, 2011 and World of Warcraft keeps Activision in competition with its nearest rival, Electronic Arts Inc. (ERTS).
Electronic Arts also has some major releases planned for the holiday season, the first being Battlefield 3 that has already sold over 5 million units in the first week after launch. Another major release slated for December is the highly anticipated massively multiplayer online game Star Wars: The Old Republic.
We believe that a healthy product pipeline for the holiday season will help Activision tap the strong demand, thereby driving its top-line growth. However, a gloomy macro environment in North America and Europe, increasing competition and weak video game results during the last 12 months, as well as Activision’s absence from the social and mobile gaming platforms will act as headwinds in the near term.
We, therefore, have a Neutral recommendation on Activision over the long term (for the next 3 to 6 months). Currently, Activision has Zacks #3 Rank, which implies a Hold rating in the short term.
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