Activision Blizzard recently ended its partnership and ceded publishing rights of the Destiny franchise to Bungie, its developer. Following the news, shares of the company slumped 9.4% in the last two trading sessions.
Destiny was the first title to be released (Sep 9, 2014) under Activision-Bungie’s 10-year deal. In fact, Destiny holds the record for being the biggest franchise launch, having earned more than $500 million in just a day after its release. Moreover, Destiny 2, which was released in 2017, was the second-highest selling console game in North America.
Notably, post the split from the Destiny Franchise, Activision will no longer be recognizing any material revenues from the game in 2019. Per reports, losing the franchise is expected to cost the company between $300 and $400 million in revenues in 2019.
Reasons Cited for the Split
Activision has been known for abandoning its popular franchises before they become an overhang for the company. Such franchises include Guitar Hero and the Tony Hawk franchise.
Although Destiny’s Forsaken attributed to Activision’s monthly active users’ growth, 46 million monthly active users (MAUs), up 2.2% sequentially, the game failed to match the company’s expectation and enhance user engagement levels.
Reportedly, as Bungie was entitled to 20-35% of operating profits plus bonuses from Destiny, Activision’s bottom line took a toll. Moreover, as Bungie owned Intellectual Property right (IP) for Destiny, capitalizing on game-related merchandise would have been difficult for the company.
Per reports from The Wall Street Journal, Destiny is anticipated to have garnered $370 million in total revenues for 2018. The game was ranked fifth, in terms of revenues, among the company’s other popular franchises including Overwatch and Call of Duty, reflecting the overall decline of the game.
Activision Blizzard, Inc Price and Consensus
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Activision Blizzard recently ended its partnership and ceded publishing rights of the Destiny franchise to Bungie, its developer. Following the news, shares of the company slumped 9.4% in the last two trading sessions.
Destiny was the first title to be released (Sep 9, 2014) under Activision-Bungie’s 10-year deal. In fact, Destiny holds the record for being the biggest franchise launch, having earned more than $500 million in just a day after its release. Moreover, Destiny 2, which was released in 2017, was the second-highest selling console game in North America.
Notably, post the split from the Destiny Franchise, Activision will no longer be recognizing any material revenues from the game in 2019. Per reports, losing the franchise is expected to cost the company between $300 and $400 million in revenues in 2019.
Reasons Cited for the Split
Activision has been known for abandoning its popular franchises before they become an overhang for the company. Such franchises include Guitar Hero and the Tony Hawk franchise.
Although Destiny’s Forsaken attributed to Activision’s monthly active users’ growth, 46 million monthly active users (MAUs), up 2.2% sequentially, the game failed to match the company’s expectation and enhance user engagement levels.
Reportedly, as Bungie was entitled to 20-35% of operating profits plus bonuses from Destiny, Activision’s bottom line took a toll. Moreover, as Bungie owned Intellectual Property right (IP) for Destiny, capitalizing on game-related merchandise would have been difficult for the company.
Per reports from The Wall Street Journal, Destiny is anticipated to have garnered $370 million in total revenues for 2018. The game was ranked fifth, in terms of revenues, among the company’s other popular franchises including Overwatch and Call of Duty, reflecting the overall decline of the game.
Activision Blizzard, Inc Price and Consensus
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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