Blizzard Entertainment, a division of Activision Blizzard (ATVI) recently announced the availability of its free-to-play digital online game Hearthstone: Heroes of Warcraft on Apple’s (AAPL) iPad.
Hearthstone: Heroes of Warcraft is a collectible card game that revolves around turn-based online one on one games between two opponents. Hearthstone is currently available on Apple’s Mac and Microsoft (MSFT) PCs worldwide with Android, iPhone and Windows tablet versions to be unveiled soon.
The game is currently available in Australia, Canada and New Zealand. Activision expects to release it in the rest of the world in the near future.
Since its release in Mar, 2014 Hearthstone has gained immense popularity and the game’s player base is currently more than 10 million registered accounts. We believe that the introduction of the game on iPads will make it accessible to more users, which in turn will drive growth and profitability going forward.
According to DFC Forecast, the video game industry is expected to generate revenues of about $78.0 billion by 2017, which underscores the prospects of video-game developers like Activision.
Activision Blizzard has a track record of creating valuable franchises from scratch and the new game is expected to boost its customer base 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 full year also seems to be a major positive catalyst for the stock, going forward.
We believe that Activision holds a strong position and is expected to gain from superior product offerings, although competition from rivals such as Electronic Arts (EA) and Take-Two Interactive Software may rationalize growth prospects, going forward.
Currently, Activision has a Zacks Rank #3 (Hold).
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