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The publishing division of Activision Blizzard, Inc. (ATVI - Snapshot Report) recently revealed that it is making a special effort to add the innovative “dynamic swapability” play pattern to the well-known Nintendo 3DS hand-held system. Activision will introduce the feature this fall along with the launch of Skylanders SWAP Force for Nintendo 3DS.

The Skylanders franchise has a market value of $1.5 billion and leads the video gaming industry in terms of retail sales, based on strong customer base.. The Nintendo 3DS version of Skylanders SWAP Force moves a step forward by enhancing the overall gaming experience.

The Nintendo 3DS version of the game will introduce three new characters, namely Rattle Shake, Volcanic Eruptor, and Free Ranger – which are not available as part of the Skylanders Starter Pack. A combination of the console version and the Nintendo 3DS version of Skylanders SWAP Force will give players16 different playing combinations.

The Skylanders franchise gained popularity owing to its toys to life concept.Moreover, we believe that Activision’s timely initiative of rolling out a mobile version of Skylanders Cloud Patrol for Apple’s (AAPL - Analyst Report) iTunes App store and Amazon’s (AMZN - Analyst Report) Kindle Fire also enhanced its popularity.

The success of Skylanders comes at an opportune moment for Activision. The company has also been successful with some of its previous blockbusters such as the first person shooter game Call of Duty: Black Ops 2, which topped the NPD’s top 2012 games list.

Activision has a strong product portfolio, which will help to boost top-line growth over the long term. This apart, Activation’s partnership with Tencent is expected to help it gain traction in China. Moreover, the robust performances of its Call of Duty, Skylanders and World of Warcraft franchises are expected to boost near-term results. A higher mix of digital revenues is expected to help margins as well.

However, significant competition from Electronic Arts (EA - Analyst Report) could act as a headwind going forward.

Currently, Activision Blizzard has a Zacks Rank #1 (Strong Buy).

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