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Activision Expands on Kindle Fire

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Video game publisher, Activision Blizzard Inc. (ATVI - Free Report) is extending its reach on mobile platforms. Activision recently announced that its upcoming new mobile game Skylanders Cloud Patrol will be available on Amazon’s (AMZN - Free Report) Kindle Fire as well as on just-released Kindle Fire HD.

As previously announced by the company, Skylanders Cloud Patrol will also be available for download from Apple’s (AAPL - Free Report) iTunes App store and can be played on iPhone, iPad and iPod touch. The addition of Kindle Fire is expected to boost the game’s user base going forward.

The storyline of Skylanders Cloud Patrol is similar to the web and console versions of the Skylanders franchise. The mobile game is set in a region of Skylands ruled by the followers of evil Portal Master Kaos. Gamers get to play the role of Portal Master, who faces the challenges and finally eliminates the evil rulers with the help of 30 different Skylander characters.

In the course of the game, players can unlock Skylanders and win in-game virtual items by using a password available with each Skylanders action figure. Gamers can also purchase in-game virtual items by using virtual currency, which is an added feature of the mobile version.

For the first time in the franchise’s history, players will be able to buy Skylander toys within the game app. The feature is exclusive to Kindle Fire users, who can immediately unlock the digital character. Although the new mobile game is not a free app, we believe that the popularity of the “Skylanders” brand coupled with its availability on Kindle Fire and Apple devices will benefit the new game going forward.

It seems that Activision is seriously redrawing its mobile gaming strategy to strengthen its position in the rapidly growing mobile gaming market. Although the company introduced a mobile feature known as Call of Duty Elite with its highly successful Modern Warfare 3, Skylanders is its first popular franchise with a full mobile version.

We expect that Activision will continue to release mobile versions of its popular games going forward in order to gain market share in the mobile gaming sector over the long term. Moreover, this will provide it a significant competitive edge over Zynga Inc. (ZNGA - Free Report) and Electronic Arts Inc. (EA - Free Report) in the mobile gaming sector.

Thus, we maintain our Outperform recommendation on the company over the long term (6-12 months). Currently, Activision has a Zacks #2 Rank, which implies a ‘Buy’ rating in the short term (1-3 months).

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