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Activision Blizzard (ATVI) Releases WoW Expansion Dragonflight

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Activision Blizzard (ATVI - Free Report) recently announced the release of World of Warcraft: Dragonflight on its platform, which is the ninth expansion of Blizzard’s World of Warcraft (WoW) series.

This expansion has brought new updates to the core system, such as a talent tree system that provides extraordinary control over gameplay and the ability to make more impactful choices at every level of the game. The heads-up display, which has been redesigned, can now be easily customized for all types of players with the addition of edit mode.

However, per Piunikaweb, there have been multiple reports by players about facing server and login issues during the debut of Dragonflight. Players around the globe claim that characters are being unable to load and UI settings are being reset to default.

Despite this, it has to be noted that the WoW series by Blizzard has been one of the most appreciated online games of the company. Its previously released edition, World of Warcraft: Shadowlands, has been the fastest-selling WoW expansion of all time, with more than 3.7 million copies sold in one day, per Statista. Dragonflight, which brings in new experiences with the above-mentioned updates, is also expected to gain similar traction once the technical glitches have been fixed.

Will Activision Blizzard Survive the Online Gaming Market?

Per PwC’s Global Entertainment and Media Outlook 2022-2026, the global gaming industry is expected to be worth $321 billion by 2026.

This serves as an opportunity for Activision Blizzard to expand its user base and boost its top line, which is currently lagging. In third-quarter fiscal 2022, the company’s net bookings declined 3% year over year and total revenues also fell 14% to $1.782 billion.

A recent blow that came to the company is Blizzard’s failure to extend its licensing agreement with NetEase (NTES - Free Report) , which operates its games in China. This will suspend the gaming services of Blizzard in China from Jan 23, 2023.

Per Statista, China is going to be generating the most revenues for the gaming industry in the near future in global comparison. This is further expected to hit revenues for Activision Blizzard.

On a macro level as well, Activision has been facing headwinds, as, due to the lifting of the COVID restrictions, people are shifting their preferences from online gaming to outdoor activities.

Activision Blizzard has been focusing on expanding its gaming portfolio to retain existing customers and also track new ones.

Its upcoming slate of releases in 2023 includes Call of Duty: Warzone Mobile, which already has 20 million pre-registered players on Google Play and the fourth installment of the Diablo series that supports cross-play. This is expected to boost sales in the coming quarters.

The shares of Activision have risen 12.4% year to date against the Zacks Consumer Discretionary Sector, which fell 33.6% in the same time frame.

Activision Blizzard to Face Competition

Though this Zacks Rank #3 (Hold) company is strengthening its gaming pipeline, it still faces tough competition from competitors like Electronic Arts (EA - Free Report) and Take-Two Interactive (TTWO - Free Report) .

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Shares of Electronic Arts have declined 2.6% year to date. In second-quarter fiscal 2023, its net bookings were up 4% year over year, which is further expected to bolster with the release of Need for Speed Unbound on Dec 2, and Dead Space and Wild Hearts in 2023.

Shares of Take-Two have declined 43% year to date. The company is set to launch Marvel's Midnight Suns in December. It expects its fiscal 2023 revenues to jump 73.3% year over year.

However, Activision is in talks of getting acquired by Microsoft. Though the deal is facing anti-trust issues in the United States as well as the UK and EU, if successfully closed, it shall help the gaming giant battle its competitors.


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