Activision Blizzard (ATVI) recently announced that its World of Warcraft franchise has surpassed 10 million subscribers worldwide as of Nov 13, 2014.
This announcement happened to coincide with the launch of the fifth expansion pack of the same franchise, tiltled World of Warcraft: Warlords of Draenor. The new expansion pack sold over 3.3 million copies on the very first day of its launch. We believe that the expansion pack will help in further boosting the franchise’s subscription numbers, going forward.
Created in 2004, World of Warcraft is a massively multiplayer online role-playing game (MMORPG) developed by Blizzard Entertainment. Currently, it is the most subscribed MMORPG worldwide.
Recently, Activision’s management expressed its intention of extending its footprint in the Middle East, eyeing its 300 million Arabic-speaking residents. This, in turn, is expected to drive top-line growth going forward. In the recently concluded third quarter, the company garnered 65% of its revenues from outside of the United States.
Meanwhile, Activision settled an investor lawsuit and will receive $275 million from Vivendi.SA (V) and others who were involved in the sale of a stake in Activision back to the company itself in 2013. We believe that this will further boost Activision’s finances.
Both Electronic Arts (EA) and Take-Two Interactive (TTWO) have postponed their much-anticipated games Battlefield and Evolve to 2015, which will benefit Activision. Moreover, Activision has the most robust product pipeline for the upcoming holiday season which gives it an edge over Electronic Arts, Take-Two Interactive, Glu Mobile (GLUU) and others.
However, Activision’s limited presence in the mobile gaming segment, higher adoption of free-to-play games and significant competition are the major headwinds in the near term.
Currently, Activision has a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
To read this article on Zacks.com click here.
Get all Zacks Research Reports and be alerted to fast-breaking buy and sell opportunities every trading day.
Be the first to comment