Complexity won this year’s Call of Duty (COD) Championship, which was jointly organized by Activision Blizzard (ATVI) along with Microsoft’s (MSFT) Xbox and development studio, Infinity Ward.
The annual tournament aims at popularizing the Call of Duty franchise, which continues to be one of the top revenue earning games for Activision. Over the last five years, the Call of Duty installments have regularly featured in the list of the top ten best selling games across the globe.
The Call of Duty series was launched in 2003. Per Activision, the franchise’s latest release Call of Duty: Ghosts launched in November, 2013 has turned out to be the best selling game on the next generation PS4 and Xbox One consoles in the fourth quarter of 2013.
Call of Duty: Ghosts received 74 from game rating firm Metacritic, while the Hardcore Gamer magazine gave it a score of 95, reflecting positive reviews from all fronts. As per the latest NPD data, Call of Duty: Ghosts continued to retain its top position as the best selling game in February for the fourth consecutive month.
Online playing time by all Call of Duty users across the globe exceeded 4 billion hours during the last quarter, thus allowing the franchise to generate more revenues in a single year than any other console game has in the past.
Activision continues to launch downloadable content (DLC) packs frequently in order to keep the franchise fresh, which attracts new gamers. The company recently launched a DLC pack called Onslaught for Call of Duty: Ghosts. We believe that the new DLC will boost Activision’s top-line going forward.
Activision Blizzard posted better than expected results in the just concluded quarter and full year ending Dec 2013 despite a year-on-year dip. The upbeat guidance provided by the company for the first quarter of 2014 as well as for the whole year also seems to be a major positive catalyst for the stock going forward.
In 2014, Activision is planning to launch the eleventh installment of the game called Call of Duty: Sledgehammer. We believe that the new game has the potential to be among the largest and the most profitable in its respective sphere.
We believe that Activision holds a strong position and is expected to gain from superior product offerings. However, competition from rivals such as Electronic Arts (EA) and Take-Two Interactive Software (TTWO) may rationalize growth prospects going forward.
Currently, Activision has a Zacks Rank #3 (Hold).
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