Activision Blizzard (ATVI, Financial), the holding company for Activision, Blizzard Entertainment and Sierra Entertainment, is one of the largest gaming companies in the world. But unlike rivals like Take-Two Interactive (TTWO, Financial), Activision has branched out its revenue streams that make it a superior company and a better investment. The company has many hit titles and the success of those games is reflected in its share price.
Physical collectibles are combined with the videogame via gadgets that encourage players to rapidly change the course of deed in the software plot. Customers hunt the rare figures, thus giving Activision Blizzard an option to fight the depreciation in the value of the industry because of the up and coming digital age.
Diversifying revenue streams
Activision Blizzard's revenue relies heavily on maturing franchises like Call of Duty, Skylanders and World of Warcraft. Consequently, Activision's share price is negatively affected by fading Call of Duty sales or World of Warcraft subscribers although Activision has gradually expanded its revenue with new titles like Destiny.
Activision continuously chains the game with a series of expansions and promotes revenue every month. As per the latest earnings report, Hearthstone set a record for monthly sales.
Hearthstone: Heroes of Warcraft has been developed for new platforms like Android and iPhone.
Great growth
For the Q4FY14, on a non-GAAP basis, revenues rose 11% and record earnings per share escalated more than 50% compared to previous years, double-digit revenue progress and higher-margin record digital revenues that signify an all-time high of 46% of entire revenues. And we shaped more additional great content in 2014 than ever before.
Activision also achieves benefits from the digital shift. There were 46% sales in 2014, an increment of 50% compared to 2013. Rising collection of AAA game brands has become the main reason to like Activision Blizzard. Most of the sales and profits were mainly due to three franchises –Â Call of Duty, World of Warcraft and Skylanders. But with the introduction of Destiny and Hearthstone in the collection of last year and with the Heroes of the Storm, Overwatch and Call of Duty planned for 2015, the collection will be crammed with 10 bestseller franchises.
Future titles
Activision has two new games planned, Overwatch and Heroes of the Storm, and could bring in long-term profits from Call of Duty: Online, a free-to-play version of its extremely admired shooter currently limited to China.
Conclusion
Despite the fact that ATVI's guidance for the quarter is delicate, its planned releases, expected 10 noteworthy titles in 2015 and speculations on free-to-play activities, demonstrate that the organization is centered on fortifying crucial zones of its business.
In this way, albeit 2015 may not give incredible upside to investors, ATVI's methodologies for the year demonstrate that the organization could give satisfactory returns in the longer run.
