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Activision Unveils Hearthstone: Rise of Shadows Expansion Pack

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Activision’s Blizzard Entertainment released the latest expansion pack for Hearthstone - Rise of Shadows.

The free digital collectible card game features up to 135 new cards in the current expansion pack. Users can access the game on PCs (Windows and Mac), tablets (Windows, iOS, and Android) and mobile phones (iPhone and Android) globally. Additionally, Activision noted that it will bring more features this year.

Moreover, the single-player game mode in Hearthstone, Solo Adventure, will be unveiled this May. The mode will contain five chapters with the first one freely accessible to everyone. The rest can be purchased at $19.99 or each “chapter can be unlocked for 700 gold.” Notably, Hearthstone has more than 100 million players worldwide.

Activision Blizzard, Inc Revenue (TTM)

 

Activision Blizzard, Inc Revenue (TTM) | Activision Blizzard, Inc Quote

Investments in Franchises Bode Well

The launch of Hearthstone’s new expansion pack is in line with Activision’s strategy to deploy more resources for its franchises including Call of Duty, Overwatch, Candy, Warcraft, Diablo and Hearthstone in 2019.

Additionally, Activision is expected to benefit from the growing e-sports market coupled with the increasing popularity of its Overwatch League. Notably, global e-sports market revenues are expected to hit $1.1 billion in 2019, indicating year-over-year growth of about 27% per Newzoo.

The 2019 Overwatch League, which began on Feb 14, 2019, not only features an extended team lineup but also new venues. Increase in number of venues reflects the growing appeal of the league.

Moreover, Activision stated that it is looking to build a city-based Call of Duty league deriving its experience from the Overwatch league. Call of Duty with its frequent content updates and expanding presence across platforms and geographies may attract more users.

Further, the releases of Sekiro: Shadows Die Twice and Crash Team Racing Nitro-Fueled are a positive.

Absence of Major Releases May Hurt Top Line

Activision’s lack of major releases for 2019 may lead to softness in in-game monetization. This may take a toll on the company’s top line in the near term.

Additionally, lower retail demand for its popular games may add to its worries. Notably, Call of Duty: Black Ops 4 sales were lower than management’s expectation in the second half of the quarter due to lower retail demand and pricing.

Moreover, Take Two Interactive’s (TTWO - Free Report) recent release of Sid Meier's Civilization VI: Gathering Storm and Ancestors: The Humankind Odyssey and Electronic Arts’ (EA - Free Report) Apex Legends are expected to hurt Activision’s market share in the near term.

Zacks Rank & A Key Pick

Activision currently carries a Zacks Rank #3 (Hold).

A better-ranked stock in the broader consumer discretionary sector is Comcast (CMCSA - Free Report) , which carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Long-term earnings growth rate for Comcast is projected at 13%.

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