Activision Blizzard (ATVI) Last Update 9/6/23
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Activision Blizzard
King Digital
Trefis Price
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Potential upside & downside to trefis price

Activision Blizzard Company


  1. King Digital constitutes 36% of the Trefis price estimate for Activision Blizzard's stock.
  2. Activision constitutes 34% of the Trefis price estimate for Activision Blizzard's stock.
  3. Blizzard constitutes 17% of the Trefis price estimate for Activision Blizzard's stock.


  1. Q2 2023 Performance
Activision Blizzard saw a 50% y-o-y rise in its total bookings in Q2 2023, primarily due to the launch of Diablo IV. The overall monthly active users (MAUs) decreased 1% y-o-y to 356 million, compared to 361 million in June 2022. The company reported earnings of $0.91 per share on an adjusted basis in Q2 2023, compared to $0.48 per share in the prior-year quarter due to higher revenues and over 600 bps rise in its segment operating margin.

  1. Microsoft To Acquire Activision Blizzard
Microsoft plans to acquire the gaming giant - Activision Blizzard - known for its very popular Call of Duty and Candy Crush franchises, in an all-cash deal valued at $69 billion. Now, Activision Blizzard’s stock closed at $65 levels on Jan 17, 2022, and Microsoft’s offer of $95 per share reflected a premium of 46%. However, Microsoft is facing regulatory headwinds from European Commission and the U.S. FTC, both investigating the deal.

  1. Lawsuits Against Activision Blizzard

A California-based agency filed a lawsuit against Activision Blizzard for sexual harassment and discrimination. To add to its woes, the employees of the company and a major media labor union have also filed an unfair labor practice lawsuit against Activision Blizzard. The company is accused of worker intimidation and union busting. This development did not sit well with the investors, resulting in its stock price plummeting to levels of around $67 in November 2021 from levels of nearly $100 seen in mid-June. It recovered to trade at around $77 (Apr 26, 2023) and currently is around $92 (as of early Sept 2023).

  1. Impact of Coronavirus On Activision Blizzard's Stock

While the Covid-19 outbreak and associated lockdowns resulted in an uncertain outlook for the broader markets, the multi-billion-dollar Fed stimulus announced in late March helped the markets stage a strong recovery.

Activision Blizzard, along with other gaming companies, benefited in the Covid-19 crisis, as the demand for gaming gained traction, given that more people were confined to their homes, eschewing more public forms of entertainment.

Even before the crisis, Activision Blizzard was doing well, with its stock up 25% in 2019, led by continued demand for the Call of Duty franchise. However, the gaming demand slowed down in 2022-23. Furthermore, higher inflation and slowing economic growth will likely weigh on the company's top-line growth in the near term.

  1. Activision's Success With Games

Barring the delay in some of its games, Activision appears to be well settled for the near term, thanks to its strong portfolio of globally famous games.

“Overwatch,” with more than 30 million active users, appears to be just getting started and garnering incremental popularity because it touches upon competitive play ~ e-sports, a domain that has drawn a lot of attention.

While World of Warcraft bolstered Blizzard's segment performance in 2018, there was no new release for the franchise in 2019, and this impacted the segment performance. The company released an expansion pack for the World of Warcraft game in November 2020.

Call of Duty franchise continues to see massive demand, and the company will look forward to strong sales from its latest release - Call of Duty: Vanguard.

Lastly, the company expanded its audience through the acquisition of King Digital, which has helped the company add around 300 million active users and given it a strong foothold in the burgeoning mobile gaming platform.


Blizzard's EBITDA Margin

Blizzard EBITDA Margin: Blizzard EBITDA margin stood at about 29% in 2022. We expect margins for the division to increase (to 45%) over the Trefis forecast, driven by higher revenues, sales of digital packs, and strong performances of the segment's new launches. If margins were to improve to highs of around 55% over our forecast period, there could be a potential upside of around 5% to our price estimate. This is possible with new game launches and increased monthly active users.

On the other hand, if the stiff price competition from other gaming companies puts pressure on margins, with the figure declining to under the 30% mark, then there could be a potential downside of about 5% to Trefis price estimate for Activision Blizzard's stock.

Activision's Monthly Active Users

Activision's Monthly Active Users: Activision's Monthly Active Users increased from an estimated 40.7 million in 2014 to 100.5 million in 2022, primarily due to higher engagement of users in existing franchises and longer shelf life of games. The popularity of the Call of Duty franchise and the success of new-age consoles helped boost the metric over the past few years. However, as the market comes to reach its saturation point, and the number declines to under 100 million by the end of the Trefis forecast period, as opposed to our current forecast of around 140 million, there could be a potential downside of over 10% to Trefis price estimate for Activision Blizzard's stock. However, if the metric continues to grow and reaches over 200 million active users, we could see a potential upside of 15%.


Activision Blizzard is a worldwide online, PC, console, handheld, and mobile games publisher. Activision develops and publishes video games on various consoles, handheld platforms, and the PC platform, through internally developed franchises and license agreements. Activision currently offers games that operate on the Sony's PS3 and PS4, Nintendo Wii and Wii U, Microsoft's Xbox 360 and Xbox One console systems, Nintendo DS, Nintendo 3DS and Sony PlayStation Vita handheld devices, the PC, Apple iPhone, iPad, and other mobile devices. Blizzard is the leader in terms of subscriber base and revenues generated in the subscription based massively multiplayer online role-playing game (MMORPG) category. Blizzard internally develops and publishes PC-based computer games and maintains its proprietary online game related service,

Its distribution business consists of operations in Europe that provide warehousing, logistical, and sales distribution services to third-party publishers of interactive entertainment software as well as its own publishing operations and manufacture of interactive entertainment hardware.


Call of Duty

Call of Duty is widely regarded as the all-time highest-selling third-party gaming franchise in dollar terms. Call of Duty has been the most successful franchise in Activision’s history, with a total of over 400 million units sold to date. It leads the FPS genre by a wide margin. Moreover, Call of Duty Online is one of the biggest online gaming communities in the world, with a huge gamer base and interactive interface. The franchise helps generate a lot of revenue for the company.

World of Warcraft

World of Warcraft (WoW) is officially the most-played MMORPG throughout the world, with a subscriber base surpassing 10 million members. WoW is sometimes referred to as the money-minting machine for Activision Blizzard, as margins in the MMORPG business are very high. However, the company has been witnessing a decline in the subscriber base of the franchise due to strong competition from other free-to-play online MMORPGs in the market.


COVID-19 Impact

Activision Blizzard benefited in the Covid crisis, as the demand for gaming saw traction, given that more people were confined to their homes, eschewing more public forms of entertainment. However, this trend has now cooled off, with a decline in overall gaming demand.

Increasing Demand For New Generation Consoles

Both of the next-generation consoles, the X-Box Series X and the PlayStation 5, were launched in the 2020 holiday season, and they saw strong demand. With the growth in demand for new consoles, the software demand is also expected to rise.

Gaming Industry's Changing Landscape From Retail To Digital

The video gaming industry has been changing from retail to digital. This is evident by the fact that a growing number of games are being published digitally and subsequent launches of digital packs for individual games, which help increase their shelf life. Activision Blizzard has also changed its strategy to focus its sales on a mix of retail and digital gaming products. The DLC (Downloadable Content) map packs for Call of Duty: Advanced Warfare have performed exceedingly well and the trend is expected to continue.

Rise of Social Gaming

The increasing digitization of the video gaming industry has ensured that video games won't stay limited to consoles and handhelds, rather smartphones, tablets, and social networking sites are emerging as serious gaming platforms. Casual and mobile gaming is becoming increasingly popular in Western markets. According to Newzoo’s global games market report, mobile games revenue is expected to grow in double digits in the near term. Though Activision Blizzard's primary target consumer base is hard-core console gamers, the company is making strides toward diversifying into new platforms.