Activision Blizzard Gears Up For A Promising Future

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ATVI: Activision Blizzard logo
ATVI
Activision Blizzard

 

Buoyed by the burgeoning popularity of “Call of Duty“, the tremendous response to “Overwatch” and the continued strength of King Entertainment’s “Candy Crush“, Activision Blizzard (NYSE:ATVI) was able to beat estimates with its Q2 results. The company’s revenues more than doubled year over year to $1.61 billion, primarily due to the acquisition of King Digital and the strong response to the competitive game “Overwatch“. Since the launch of the so called futuristic first person shooter game on May 24 2016, it has garnered a staggering 15 million players globally. Along with continued strength across the portfolio, this helped Activision record its biggest quarterly online player community of 33 million monthly active users (MAUs). Overall, the company recorded 491 million MAUs.

ATVI Earnings Q2

Looking ahead, Activision appears well settled for the near term, thanks to its strong portfolio of globally famous games and the upcoming launch of “World of Warcraft’s” expansion, “Legion.” “Overwatch” appears to be just getting started and it is going garner incremental popularity because it touches upon competitive play/e-sports, a domain that has drawn a lot of attention. World of Warcraft appears to have ran its course but the new expansion should provide a significant near term increase in subscribers. Alongside, Activision’s growth will get a lift from the launch of a new adventure for “Hearthstone“, an expansion of the  “Destiny” universe, a new game entitled “Skylanders: Imaginators” and the highly anticipated “Call of Duty: Infinite Warfare“. The company expects revenues of $6.4 billion for the year with EPS of $1.83, which will represent a significant increase over last year’s levels of $4.6 billion and $1.32, respectively. Although much of the growth will be attributable to the acquisition of King Digital, Activision’s organic growth would also play a vital role.

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Notes:

1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment and ask questions on the comment section, or email content@trefis.com
2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis for Activision Blizzard
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