Activision Blizzard Inc.
's (
ATVI
) upcoming game
Call of Duty: Black Ops II
will let gamers revisit "Nuketown", a popular multiplayer map that
was first introduced in
Call of Duty: Black Ops
. "Nuketown" has been the most played multiplayer map in the
game's history.
The new map, named "Nuketown 2025", comes as a downloadable
bonus map for gamers who pre-order
Call of Duty: Black Ops II
. The game is set to release on November 13, 2012. "Nuketown 2025"
will be a depiction of a typical town in the 1960's with a blend of
science fiction. The size of the map is not expected to change and
gamers can expect enhanced pulsating action from what they had
encountered in the previous version.
The
Call of Duty
franchise has one of the most ardent fan followings and has been
one of the most played games in 2010. Now touted as the most valued
entertainment property,
Call of Duty
has already raked in more than $6 billion in sales (life to date).
It is expected that the upcoming game will significantly increase
Activision's cash flow going forward.
However, gamers might be tired with the release of
Call of Duty
games every year due to the overexposure of the game. This is a key
aspect that the company should keep in mind, as its top line shrank
22.2% year-over year in the first quarter of 2012 mainly due to
lower-than-expected sales from the
Call of Duty
franchise as well as declining subscriber base of
World of Warcraft
and lesser number of downloadable content ("DLC") releases.
We believe that the new Nuketown DLC reflect Activision's
strategic marketing ploy to boost the sales of the upcoming
Call of Duty
game. Moreover, Activision has outlined a solid portfolio of
games that are slated to release in 2012. Its initiatives to
strengthen its portfolio through the launch of new versions and
content packs would be beneficial over the long run. Activision's
foray into the mobile gaming market should also be a long-term
positive.
However, softness in the video game industry and Activision's
limited presence in the social gaming market coupled with
significant competition from
Electronic Arts Inc.
(
EA
) and
Take-Two Interactive Software Inc.
(
TTWO
) are the near-term headwinds. The lack of new titles (not sequels
or downloadable contents) and over-dependence on old franchises,
particularly on
Call of Duty
and
World of Warcraft
, are the other challenges going forward.
We have a Neutral recommendation on Activision in the long term.
Currently, Activision has a Zacks #3 Rank, which implies a Hold
rating in the short term.
ACTIVISION BLZD (ATVI): Free Stock Analysis
Report
ELECTR ARTS INC (EA): Free Stock Analysis
Report
TAKE-TWO INTER (TTWO): Free Stock Analysis
Report
To read this article on Zacks.com click here.
Zacks Investment
Research