Activision ATVI recently announced the appointment of J. Allen Brack as the new president of Blizzard Entertainment.
Brack earlier served as the executive producer and senior vice president of the World of Warcraft franchise
and will succeed Mike Morhaime.
With 24 years of experience in the gaming industry, Brack will now lead the Blizzard Entertainment team to further strengthen Activision's position in the gaming market.
Prior to joining Activision, Brack worked on some popular games like Star Wars Galaxies
and Wing Commander
Franchise. This experience coupled with his 12-year stint at World of Warcraft
franchise will help Brack to fulfil his new responsibilities.
Notably, Activision also announced that Ray Gresko and Allen Adham, Blizzard's founder, will be part of the company's executive team. Gresko has been appointed as the chief development officer. Activision Blizzard, Inc Revenue (TTM)
Activision Blizzard, Inc Revenue (TTM) | Activision Blizzard, Inc Quote
Blizzard Derives Strength From Franchises
Blizzard Entertainment, which publishes traditional and online subscription-based games, derives strength from its well-known franchises such as World of Warcraft , Overwatch and Hearthstone among others.
World of Warcraft , the popular subscription-based massively multi-player online role-playing game (MMORPG) has been a major revenue contributor over the years. Management noted that Activision's well-known games like Call of Duty , World of Warcraft , Overwatch and Candy crush contributed 66% to total revenues for fiscal 2017.
Additionally, Activision expects fiscal 2018 revenues to benefit from the release of World of Warcraft: Battle for Azeroth and Call of Duty: Black Ops 4 . Notably, the company's majority of subscription revenues are also derived from players who sign up to play World of Warcraft .
Moreover, Activision enjoys an edge against competitors like Electronic Arts EA supported by its first major e-sports league, Overwatch .
Owing to the popularity of Overwatch , Activision announced a multi-annual deal to air Overwatch League 's highlights and live content on Twitter TWTR .
Additionally, the company also inked a multi-year deal with Disney to air the Overwatch e-sports league on ESPN prime time, Disney XD, and various Disney-owned streaming services.
Further, the Overwatch League 2019 season, which already has 20 teams on board is expected to benefit from the e-sports market, which is valued at $906 million in 2018 and is expected to reach $1.5 billion by 2020, per Newzoo.
Strength of Blizzard's popular franchises, management's expertise and other franchises like Call of Duty are expected to drive Activision's top line.
Competition a Concern
EA and Take Two Interactive TTWO continue to put their best foot forward to gain market share. EA won many awards at the Electronic Entertainment Expo (E3) 2018. This showcases the company's strength in developing competitive games, which have the potential to attract users. This doesn't bode well for Activision.
Moreover, with the release of Take Two's Red Dead Redemption 2 and EA's Battlefield V , competition will further intensify in the gaming space.
Activision currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
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