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Why Is Activision Blizzard (ATVI) Stock Gaining Today?
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Shares of video game developer Activision Blizzard are up nearly 1.75% on Thursday following impressive sales numbers from its latest game and subsequent analyst rating adjustments.
On Wednesday, Activision announced that its new first-person shooter game Overwatch already has 10 million players. In response to this news, Barclays raised its price target for the stock to $42 from $38, and the firm also raised its 2016 earnings estimate 10 cents to $2 per share.
The first-person shooter category is always crowded, but the early success of Overwatch and the residual effects of Call of Duty: Black Ops III, released late last year, could give Activision a competitive edge.
“We believe the success of Overwatch and strong engagement from Black Ops carrying over should mitigate the risk for ATVI,” said Barclays’ analyst Christopher Merwin in a note released Thursday morning.
With many analysts predicting initial sales of around five million copies, the fact that Overwatch already has 10 million players online is certainly a bullish sign. It’s important to note that Overwatch is still in the early stages of its life as a game, and Activision plans on expanding its capabilities as a competitive game that could become a fixture in the professional gaming community.
Activision is also riding a wave of momentum from its new movie Warcraft, which is based on its World of Warcraft video game franchise. Although it hasn’t been a critical hit, Warcraft seems to be a fan favorite and currently sports a 7.6/10 on IMDB.
Of course, movies have to make money too. Warcraft did about $171.7 million at the box office in its opening weekend, and the film had a budget of about $160 million. Hollywood accounting is always kind of funky, but the movie should be in the green from here on out, meaning that Activision should be in for another nice payday.
Warcraft has seen remarkable success in emerging markets, especially Asia, where the video game franchise is incredibly popular. World of Warcraft is slowly dying off after years of being one of the world’s most popular role-playing games, but it should be great news for Activision if this film breathes new life into the brand.
At this week’s E3 conference, Microsoft (MSFT - Free Report) announced a new, more powerful version of the Xbox, which is set to debut in the late 2017. This release cuts the new console cycle nearly in half, seemingly reducing the emphasis on that cycle in the gaming community.
A smaller emphasis on consoles could actually benefit Activision in the long run. The company is very popular with PC gamers, supports cross-platform play, and cashes in on the growing fad of eSports.
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Why Is Activision Blizzard (ATVI) Stock Gaining Today?
Shares of video game developer Activision Blizzard are up nearly 1.75% on Thursday following impressive sales numbers from its latest game and subsequent analyst rating adjustments.
On Wednesday, Activision announced that its new first-person shooter game Overwatch already has 10 million players. In response to this news, Barclays raised its price target for the stock to $42 from $38, and the firm also raised its 2016 earnings estimate 10 cents to $2 per share.
The first-person shooter category is always crowded, but the early success of Overwatch and the residual effects of Call of Duty: Black Ops III, released late last year, could give Activision a competitive edge.
“We believe the success of Overwatch and strong engagement from Black Ops carrying over should mitigate the risk for ATVI,” said Barclays’ analyst Christopher Merwin in a note released Thursday morning.
With many analysts predicting initial sales of around five million copies, the fact that Overwatch already has 10 million players online is certainly a bullish sign. It’s important to note that Overwatch is still in the early stages of its life as a game, and Activision plans on expanding its capabilities as a competitive game that could become a fixture in the professional gaming community.
Activision is also riding a wave of momentum from its new movie Warcraft, which is based on its World of Warcraft video game franchise. Although it hasn’t been a critical hit, Warcraft seems to be a fan favorite and currently sports a 7.6/10 on IMDB.
Of course, movies have to make money too. Warcraft did about $171.7 million at the box office in its opening weekend, and the film had a budget of about $160 million. Hollywood accounting is always kind of funky, but the movie should be in the green from here on out, meaning that Activision should be in for another nice payday.
Warcraft has seen remarkable success in emerging markets, especially Asia, where the video game franchise is incredibly popular. World of Warcraft is slowly dying off after years of being one of the world’s most popular role-playing games, but it should be great news for Activision if this film breathes new life into the brand.
At this week’s E3 conference, Microsoft (MSFT - Free Report) announced a new, more powerful version of the Xbox, which is set to debut in the late 2017. This release cuts the new console cycle nearly in half, seemingly reducing the emphasis on that cycle in the gaming community.
A smaller emphasis on consoles could actually benefit Activision in the long run. The company is very popular with PC gamers, supports cross-platform play, and cashes in on the growing fad of eSports.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>