Half a billion in sales in just three days: Activision’s share price falls on ridiculous expectations
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Half a billion in sales in just three days: Activision’s share price falls on ridiculous expectations

Last week, the latest iteration of Activision Blizzard’s flagship franchise Call of Duty went on sale. And video game enthusiasts came out in unison to get hold of it. The company said that Call of Duty: Black Ops 4 had sales of more than $500 million in its first three days. Understandably, the video game titan was ecstatic with its new title’s reception. Investors were less so, and sent the stock down by 7%.

Activision Blizzard’s share price is still up by 12% so far this year

graph 2210 activision

SOURCE: Yahoo Finance

Activision exec Rob Kostich described the launch like this: “Black Ops 4 is off to a blockbuster start. Our digital sales results have been record-breaking across all platforms, and the overall performance strong. We’re really excited about Black Ops 4’s momentum. There’s much more to come, we’re just getting started.” Total sales were roughly flat against last year’s Call of Duty: WWII, but investors had probably hoped for more growth in the company’s flagship franchise. Some analysts are questioning that sentiment.

Baird analyst Colin Sebastian sent out a note last Thursday that points to how many people are playing the new game: “total player count across online modes still exceeded the combined single-player and online engagement for WWII”. According to Sebastian, this implies that Activision will be in a position to sell more units in the fourth quarter – especially likely, given that this game came out in October, rather than the company’s usual Call of Duty release month of November.

Wedbush Securities analyst Michael Pachter also said that the early release could be skewing figures – according to him, a number of players may have been unaware of the early release, thereby reducing initial sales. He said: “I think that investor expectations have gotten unrealistic. So a flat result is great. The market doesn’t seem to appreciate that, and expectations weren’t set properly.”


Dominion holds Activision Blizzard in its Global Trends Luxury Fund.

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