For the year, Activision Blizzard (NASDAQ:ATVI) stock has been choppy. Yet the overall return has still been fairly decent. Note that ATVI stock is up about 20%. This is actually in line with rival Electronic Arts (NASDAQ:EA).
So on Thursday — after the market closes — we’ll get more details on how things are tracking with Activision Blizzard, when the company will report its third-quarter results. But what are the expectations?
Well, it does look like they should be beatable. The Street is looking for profits of 23 cents a share, down from a gain of 52 cents a share in the same period a year ago. As for revenues, the consensus is for $1.2 billion. This would be a 29.4% drop on a year-over-year basis. Yes, when it comes to the gaming business, the quarterly results can certainly show wide swings.
Regardless, I think there are some important catalysts for Activision Blizzard stock. The fact is that the company is showing lots of traction with its pipeline.
Consider its recent launch of Call of Duty: Modern Warfare, which was made available for Sony (NYSE:SNE) PlayStation 4, Microsoft (NASDAQ:MSFT) Xbox and PC platforms. Over a mere three days, the title generated over $600 million in sell-through on a worldwide basis (this was twice as much as the opening box office for the movie Joker). It’s not only the highest debut of any Call of Duty title, it was also the biggest seller for 2019 overall. It is also encouraging that it represented the highest digital opening for Activision.
Granted, the title will not be in the Q3 results. But it should help with the guidance — and this could mean a lift for Activision Blizzard stock.
Next, this week was the BlizzCon event, which attracted more than 40,000 attendees from 59 countries. It was definitely a clear sign that ATVI continues to have strong customer loyalty. But it also was a demonstration of the breadth of the franchises of the company.
For example, the company announced Diablo IV (the prior version was launched in 2012). It takes place further in the future after millions have died and there is no clear leader. So yes, there should be no shortage of action. However, a release date was not announced.
At BlizzCon, ATVI also announced other upcoming titles like:
- Overwatch 2. This hit game, which has more than 50 million players, will bring team missions in story mode and also player-versus-player team battle.
- World of Warcraft: Shadowlands: This will involve an expansion with five new zones, a revamped leveling system and better character customization. This game will be available in 2020.
- Hearthstone: Battlegrounds: This is an eight-player game that has 24 unique heroes. The game will be open in beta on Nov. 12.
Bottom Line On Activision Blizzard Stock
During the past year, Activision has had to deal with the adverse impact from the “battle royale” monster game, Fortnite. But the good news is that the company has been able to adapt, as seen with the huge success of Call of Duty: Modern Warfare. The gaming industry seems to be normalizing to historical trends.
But going forward, Activision Blizzard stock should benefit from other strong catalysts. The company has been leveraging its resources into becoming a power in the eSports industry. What’s more, there will likely be a multi-year boost from the launch of new consoles next year.
In other words, Activision Blizzard stock should be back to its winning ways — and soon.
Tom Taulli is the author of the book, Artificial Intelligence Basics: A Non-Technical Introduction. Follow him on Twitter at @ttaulli. As of this writing, he did not hold a position in any of the aforementioned securities.
