Activision Might Continue FPS Domination With New Black Ops Title

In the recently held 2015 Electronic Entertainment Expo (E3), Activision Blizzard’s (NASDAQ:ATVI) announcements came out as one of the major highlights of the event. Some believe that Activision delivered the most impressive line-up in the company’s history this year, with the  highly awaited return of the most played series in the Call of Duty series — Call of Duty: Black Ops III. Other games to feature included Guitar Hero Live, Skylanders Superchargers, as well as the next major expansion pack for Destiny, The Taken King. ^[1] The Call of Duty series accounted for 12% of all video game sales on all platforms in 2014, and held 63% market share among shooter games last year.

2015 was a pretty good year for Activision, with the launch of some of its popular franchises, such as Call of Duty: Advanced Warfare, Diablo III, and Skylanders TRAP TEAM, as well as some new path-breaking franchises, such as Destiny and Hearthstone: Heroes of Warcraft. Activision’s two new franchises, Destiny and Hearthstone, attracted over 40 million gamers combined, generating a net $850 million in non-GAAP revenues.  In 2014, Activision’s results in all the geographical segments improved y-o-y, with nearly 39% growth in Asia-Pacific and 15% y-o-y growth in Europe. ^[2]

Our $26 price estimate for Activision Blizzard’s stock is almost same as the current market price.

See our complete analysis of Activision’s stock here

Dedicated to deliver new innovative and creative game-play, as well as whole hands-on experience, Activision had the following products to showcase at the E3 2015:

• Call of Duty: Black Ops III

Activision is all set to release the next edition to the famous first-person shooter (FPS) game, Call of Duty series, with the sequel of its 2012 game—Call of Duty: Black Ops III. The game is scheduled to release on November 6 this year across major gaming platforms. The company also promised that Black Ops III will offer a greater, more detailed, and more rewarding multiplayer version in the game’s history. After peaking sales of the Call of Duty series in 2010 and 2011, the game sales per title have decreased. However, the previous two editions of Black Ops series averaged around 29 million unit sales.

Enthusiasm among the the Black Ops series’ loyal gamers, new exciting features, and mesmerizing game-play, are bound to attract as many core gamers as the previous two Black Ops version did. Anything above 25 million unit sales will be a success for the company. This is surely one of the most awaited games this year.

• Destiny

Activision’s last year’s successful new launch: Destiny, an online FPS game based on a post apocalyptic science fiction theme in a persistent online world, sold over 10 million units as of March 21, 2015, of which 4.44 million units were sold in the first week of its release, making it the third highest sold title of 2014. ^[3]  As of May 2015, Destiny had over 16 million registered users, averaging 3 hours of game-play per day. It became the highest played game in North America on the PlayStation 4 platform in December 2014. In this year’s E3 event, the company announced its intention to release a major expansion to the Destiny universe, The Taken King, in September this year. It is going to be the largest expansion pack addition to the game by far. According to VGChartz, the game has sold over 10 million copies as of April 2015. ^[4] Moreover, the latest expansion pack– House of Wolves, released on May 19, 2015, is a hit among Destiny fans. So, a new and bigger expansion pack is expected to go down well among the hardcore fans.

• Skylanders SuperChargers

The popular Role-playing adventure game for kids, Skylanders, continues to be another huge franchise for the company, with over 240 million toys sold till date and $3 billion in revenues. The franchise outsold all action figure lines in 2014, outperforming its nearest competitor by 30%. Furthermore, Skylanders’ latest title: TRAP TEAM,  outperformed its nearest competitor by 17%. According to VGChartz, Skylanders: TRAP TEAM has sold nearly 3.38 million units, as of April 2015. ^[5] In the E3 event, Activision announced its plans to launch a new Skylanders game: SuperChargers, in the fourth quarter of 2015.

Scheduled to be released on September 20, 2015, the new title is expected to introduce a redesigned ‘Portal of Power.’  Furthermore, another new exciting feature added to this new title is the introduction of ‘Vehicles.’  With many more new improvements to the existing features, the game is expected to increase the toys sales, as well as the game sales.

These new games on the next-generation platforms will surely provide an additional boost to the company’s next-generation console revenues. Apart from these core money-minting franchises, Activision also introduced Guitar Hero Live with new breakthrough features, including two different types of game-plays: GH Live, which is a first-person point of view, and GHTV, the world’s first playable music video network. The game is scheduled to release on October 20, 2015, on all the major gaming platforms.

With path-breaking titles to be released this year, Activision is optimistic of its financial, as well as operational performance, for this fiscal year.

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1. Actvision opens E3 2015 with most impressive lineup in company history [↩]
2. Activision Blizzard Q4 2014 earnings call transcript [↩]
3. Destiny global sales, VGChartz [↩]
4. Destiny game sales data, VGChartz [↩]
5. Skylanders: TRAP TEAM, VGCharts [↩]