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Activision Launches Call of Duty: Black Ops 4 Blackout Beta

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Activision (ATVI - Free Report) recently launched Call of Duty: Black Ops 4 Blackout, a battle royale (BR) game mode, in beta for players on PlayStation 4. The beta mode will allow the company to collect valuable user feedback to improve the game’s features.

Activision is scheduled to release Call of Duty: Black Ops 4 on Oct 12. The company is targeting the holiday season that will also see the release of Take Two Interactive’s (TTWO - Free Report) Red Dead Redemption 2 (Oct 26), and Electronic Arts’ (EA - Free Report) now delayed Battlefield V, which also has a BR game mode.

Blackout is not only expected to boost Activision’s competitiveness against its traditional rivals but also Fortnite, a free game that has been played by more than 45 million people worldwide. In September 2017, Epic Games introduced a BR mode for Fortnite on computers and gaming consoles.

Call of Duty: Activision’s Cash Cow

Call of Duty is one of the biggest growth drivers for Activision. Notably, more than 200 million players have played the Black Ops series for a total of more than 15 billion hours over the game’s lifetime, reflecting the franchise’s popularity.
 

 

In June, Activision launched Call of Duty: World War II’s third expansion pack, United Front on PlayStation 4. In August, the company launched the fourth expansion pack, Shadow War.

Notably, Call of Duty: World War II was the top-selling console video game in 2017 globally.

Moreover, Call of Duty: WWII World League Championship, jointly organized by Activision, Sony’s PlayStation4 and development studio, Sledgehammer Games, achieved tremendous success this year.

The championship, part of a 10-month long series, kicked off on Aug 15 with a prize pool of $1.5 million. The overall season’s prize money of $4.2 million was the highest in the game’s e-sports history.

Portfolio Strength to Aid Top-Line Growth

Activision is primarily riding on the success of Call of Duty, Destiny 2 and Overwatch. King Digital’s Candy Crush also continues to contribute significantly to the company’s top-line growth.

Activision earned $1 billion from in-game net bookings in the last reported quarter, driven by Call of Duty: WWII, Black Ops 3 and Destiny 2.

Most recently, Activision announced the international release of Destiny 2: Forsaken’s third expansion pack. Notably, Destiny 2 was the second-highest selling console game in North America in 2017.

Activision has eight $1-billion franchises including Call of Duty. Moreover, expanding franchise portfolio that includes offerings like StarCraft, World of Warcraft, Diablo, Hearthstone and Heroes of the Storm strengthens the portfolio.

Additionally, the launch of Sekiro: Shadows Die Twice, a third-person, action-adventure game with RPG elements, globally, in early 2019, further expands portfolio. The company also expanded its mobile gaming portfolio through the launch of King’s role playing game (RPG), Legend of Solgard.

Notably, Activision has teamed up with China-based Tencent to develop an all-new Call of Duty mobile game for the Chinese market — world’s largest market in terms of revenues and player numbers — according to research firm Newzoo.

E-Sports: Future Growth Driver for Activision

Activision is clearly cashing in on the growing e-sports market through its Overwatch League. Approximately, more than 130 million people follow such tournaments around the world.

Notably, the overall e-sports economy is expected to total $906 million in 2018, up from $696 million in 2017. It has the potential to hit $1.5 billion by 2020, per Newzoo. The market research firm also noted that 77% of revenues will be generated directly from marketing, sponsorships and media rights.

We believe Activision is well poised to benefit from this strong growth prospect. Its multi-year deals with Amazon’s (AMZN - Free Report)    Twitch, Disney (DIS - Free Report) and Twitter (TWTR - Free Report) are expected to enhance popularity of the Overwatch League.

The company recently brought onboard six new teams for its 2019 season that will join the existing teams from the United States and China along with 12 teams of the 2018 season, taking the total count to 20.

Currently, Activision has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here.

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