Half a billion in sales in just three days: Activision’s share price falls on ridiculous expectations
Select language to see a machine translation of this article. The original language of the Article is English and the translation is provided for your convenience.

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.”

Disclosure

Dominion holds Activision Blizzard in its Global Trends Luxury Fund.


If you would you like to receive the Newsfeeds daily, please click here to sign up now!

Help us make this Newsfeed better by rating this article. 1 star = Poor and 5 stars = Excellent
0.0/5 rating (0 votes)

Disclaimer
The views expressed in this article are those of the author at the date of publication and not necessarily those of Dominion Fund Management Limited. The content of this article is not intended as investment advice and will not be updated after publication. Images, video, quotations from literature and any such material which may be subject to copyright is reproduced in whole or in part in this article on the basis of Fair use as applied to news reporting and journalistic comment on events.