Activision Blizzard Inc.
(
ATVI
) and High Moon Studios recently launched
TRANSFORMERS: FALL OF CYBERTRON
, the game that depicts the final battle between the AUTOBOTS and
DECEPTICONS.
The game's storyline revolves around the war-engulfed home
planet of CYBERTRON. Players can choose their favorite character
and use their respective unique skills in the battle to save the
planet. Additionally, fans can play the game with or against fellow
gamers in the online multiplayer mode. The gamers also have the
option of personalizing their characters' appearance and
customizing their skills.
The game is available on
Microsoft Corp.
's (
MSFT
) Xbox 360 and
Sony Corp.
's (
SNE
) PlayStation3. The PC version of the game is also available. The
Entertainment Software Rating Board (ESRB) has proffered a "T"
("Teen") rating to the game in terms of violence quotient.
Metacritic has provided a Metascore of 82 and 78 for the Xbox 360
and PS3 versions, respectively. The positive rating indicates that
the game is likely to be popular, generating incremental sales
going forward.
Activision delivered strong results in the recently concluded
quarter. Profits doubled on a year-over-year basis, with the top
line increasing 50.8%. Management expects the launch of
TRANSFORMERS: FALL OF CYBERTRON
along with some of the content packs of
Call of Duty: Modern Warfare 3
to positively impact the upcoming quarter. Moreover, the expected
release of
Ice Age Continental Drift - Arctic Games
,
Wipeout 3
and
Angry Birds Trilogy
will be beneficial for the company's top line.
However, softness in the video game industry and Activision's
limited presence in the online gaming market coupled with
significant competition from
Electronic Arts Inc.
(
EA
) and
Take-Two Interactive Software Inc.
(
TTWO
) are the headwinds going forward. Moreover, increasing investment
related to new product development may hurt profitability in the
near term.
We have an Outperform recommendation over the long term (6-12
months). Currently, Activision Blizzard has a Zacks #1 Rank, which
implies a 'Strong Buy' rating in the short term.
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