Activision Blizzard Inc.
) publishing division recently announced that the Skylanders
franchise has garnered $1 billion in retail sales. The company
came up with the fact based on the data available from market
research firm The NPD group, Gfk Chart-track and the company's
Activision crossed the billion-dollar mark in just 15 months
and has become the first kids IP to achieve such a milestone in
such a short span. Moreover, the company sold 100 million toys as
of Jan 2013.
We believe that the popularity of the Skylanders franchise
lies in the novelty of the concept of bringing toys to life.
Moreover, Activision's timely initiative of rolling out a mobile
Skylanders Cloud Patrol
) iTunes App store and
) Kindle Fire also enhanced its popularity, in our view.
Additionally, the company has launched the franchise's latest
Skylanders SWAP Force
The success of Skylanders comes at an opportune moment for
Activision. Of late, the company has tasted success with its
blockbuster first person shooter (FPS) game
Call of Duty: Black Ops 2
, which topped the NPD's top 2012 games list.
Buoyed by the strong performance of Call of Duty and
Skylanders franchise, Activision reported robust top-line growth
in the last reported quarter. The company also intends to release
expansion packs of these franchises' games to build on the
popularity going forward.
However, the company remains cautious regarding fiscal 2013
due to the volatile macro economic environment coupled with
uncertainly related to the console transition and tough
year-over-year comparisons. Moreover, the company also provided a
We also believe that the continued softness in the video game
industry, limited presence in the mobile gaming segment, higher
adoption of free-to-play games and significant competition from
Take-Two Interactive Software
) are the major headwinds for Activision going forward. Moreover,
continued investments in new products are expected to hurt
margins in the near term.
Currently, Activision Blizzard has a Zacks Rank #4 (Sell).
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