Yesterday we finally got to peek into the books of the merged Activision-Blizzard, and from what I can tell it looks pretty good, especially given the free-fall the market has experienced. In fact, given today’s near 500 point drop in the Dow, to see a comany, any company, beat Wall Street estimates and pick up 10% in the value of its stock is like a beacon of hope. It certainly gives credence to the argument that gaming companies do well during recessions since gaming gives you the most entertainment bang for your buck.
I read the trascript from the Activision-Blizzard earnings call and it’s clear that its management is more optimistic about their prospects in the coming months than Electronic Arts, who is battening down the hatches by lowering forecasts and laying people off. ATVI, on the other hand, affirmed their outlook for the year and even increased their estimate of cost savings to be realized from the merger by $50 million.
They have big releases coming up: Call of Duty (World at War) and WoW’s Wrath of the Lich King, and the just-released Guitar Hero: World Tour attracted 25,000 user-generated songs which can be downloaded by others and could lead to a subscription model for Guitar Hero. (Take that, youtube!)
So ATVI looks to be well positioned for the holidays. Obviously the big question mark is whether the consumer will come through. Personally, I think these games are a fairly cheap way to keep the cheer in the holiday season for kids. I could easily see hardware sales being way off, especially big ticket items like laptops, and the “must have” smartphones. Those items might have been the Big Kahuna under the Christmas tree before the economy tanked, but forget about it now. However, parents can still afford to throw a few games at junior to at least avoid feeling like the grinch.
And luckily for the software companies, the latest generation of consoles came out when everyone was only to happy to run up more debt on the ol’ credit card. (Ah, how I miss those days already.) That means that most people don’t have to buy the console this Chistmas, just the new game releases. If the new consoles were just coming out this year, I’d be writing a decidedly different post. But as it stands, your average high school/college student only needs to return a few garbage bags of beer cans in order to get enough cash to head down to GameStop for Call of Duty.
So cheer up everyone. Activision-Blizzard has arrived to save Christmas! Sure, they can’t include the horrific October we just had in their numbers, but then again they won’t have to report on October numbers until after the holidays are over. Until then, what better way to escape reality than to settle in with a new game release?
Read Full Post »
StumbleUpon this blog! 
The Digital Seer 
Activision-Blizzard posts results
Posted in Economy, General, Market commentaries, MMO's, video games, tagged Activision, activision blizzard, call of duty, Economy, finance, guitar hero, stock market, stocks, video games, warcraft on November 6, 2008| 1 Comment »
Yesterday we finally got to peek into the books of the merged Activision-Blizzard, and from what I can tell it looks pretty good, especially given the free-fall the market has experienced. In fact, given today’s near 500 point drop in the Dow, to see a comany, any company, beat Wall Street estimates and pick up 10% in the value of its stock is like a beacon of hope. It certainly gives credence to the argument that gaming companies do well during recessions since gaming gives you the most entertainment bang for your buck.
I read the trascript from the Activision-Blizzard earnings call and it’s clear that its management is more optimistic about their prospects in the coming months than Electronic Arts, who is battening down the hatches by lowering forecasts and laying people off. ATVI, on the other hand, affirmed their outlook for the year and even increased their estimate of cost savings to be realized from the merger by $50 million.
They have big releases coming up: Call of Duty (World at War) and WoW’s Wrath of the Lich King, and the just-released Guitar Hero: World Tour attracted 25,000 user-generated songs which can be downloaded by others and could lead to a subscription model for Guitar Hero. (Take that, youtube!)
So ATVI looks to be well positioned for the holidays. Obviously the big question mark is whether the consumer will come through. Personally, I think these games are a fairly cheap way to keep the cheer in the holiday season for kids. I could easily see hardware sales being way off, especially big ticket items like laptops, and the “must have” smartphones. Those items might have been the Big Kahuna under the Christmas tree before the economy tanked, but forget about it now. However, parents can still afford to throw a few games at junior to at least avoid feeling like the grinch.
And luckily for the software companies, the latest generation of consoles came out when everyone was only to happy to run up more debt on the ol’ credit card. (Ah, how I miss those days already.) That means that most people don’t have to buy the console this Chistmas, just the new game releases. If the new consoles were just coming out this year, I’d be writing a decidedly different post. But as it stands, your average high school/college student only needs to return a few garbage bags of beer cans in order to get enough cash to head down to GameStop for Call of Duty.
So cheer up everyone. Activision-Blizzard has arrived to save Christmas! Sure, they can’t include the horrific October we just had in their numbers, but then again they won’t have to report on October numbers until after the holidays are over. Until then, what better way to escape reality than to settle in with a new game release?
Read Full Post »