- Even before Vivendi bought a majority stake of ATVI around Dec. 20, Activision's "Guitar Hero" and "Call of Duty" continue to outperform.
- Recently, (Dec. 20, 2007), company revised outlook upwards.
- The Blizzard/Activision combination is great, and Blizzard does have a great reputation in online gaming, and online gaming, especially MMORPGs (Massively MultiPlayer Online Role Playing Games) and online gaming in the rest of the world especially East Asia is a big growth area.
- The free model (with players paying money for items in the game) of Shanda Interactive (SNDA) seems to be working well. And we'll see what kind of business models will be used by Electronic Arts (ERTS) and Activision (ATVI)
- Forward PE of ERTS and ATVI are both around 30.
- ATVI has broken out out of a flat base, and is breaking out to new highs, with a forward PE of only 30 with a growth rate of about 23 for a reasonable PEG of 1.30.
ATVI/Blizzard looks like a good buy and could be poised for greatness over the next few years if they execute on their growth plan.
JC Comments about Activision (ATVI)
The above post was inspired after poster "JC" had these comments:
"Personally, I'd add Activision (ATVI) to the list of videogame stocks to watch out for.
Vivendi Universal (the company that owns Blizzard/World of Warcraft) and Activision are merging, and when you look at their combined game portfolio, I sincerely believe that they represent a much healthier combination of games than Electronic Arts.
Electronic Arts has so much money tied into console gaming (which is still in a transitionary cycle to the next-gen consoles), and the jury is still out whether their investment into Mythic's Warhammer Online is even going to pay out.
EA has such a piss-poor history with online gaming, that I'm not confident at all that they're going to be able to make as much growth as Activision/Vivendi.
I mean, looking forward, Blizzard accidentally let it slip out that they are working on a new MMORPG outside of the Warcraft space (which is huge, and speculation that it will be based either on Starcraft or Diablo). I think with Blizzard's reputation, that an MMO with either of those two properties will be huge! (in Asia as well as North America).
Looking at EA..., all they have in the online pipeline (that I know of) is Warhammer Online. While I realize that there are many Warhammer lead minature game stores across the company, I'm not entirely convinced that Warhammer translates well into a MMORPG, or that enough of those tabletop board gamers who are fans of the game will pick up a subscription based game for something that they do for free...IMO, the attraction of Warhammer is the purchase, creation and painting of an army, and then playing that army against real-life friends. ....so I just don't see those people ditching their nerdy social circle (which is totally fine for them, don't get me wrong) to interact with a bunch of anonymous 12 year olds screaming "Sparta!!!" and "Chuck Norris rulez!" in global broadcast chat in an online game..."