Financial Details about Blizzard’s Stock Value


You can find articles every day on user-created stock tip sites that say every stock in the universe is about to rise and the time to buy is now now now! You’d get better financial advise from your cat, though. There are real financial news sources online though, one of which is Barrons. And in this article, (thanks to my dad for the tip) you can read a lot of info about ATVI’s stock value, WoW: Panda launch projections, Skylanders toy sales, Diablo III’s big sales performance, Call of Duty about to go live for online play in China, issues with Vivendi looking to sell its 61.5% share in the company, NextGen console projections, and more.

Here’s a quote, and the full article is here.

The Chinese online gaming market, estimated at nearly $7 billion in 2011 with 160 million online gamers, is expected to increase by 20% this year and reach more than $9 billion by 2014. Tencent, which offers China’s No. 1 game, CrossFire, a free-to-play multiplayer game comparable to Call of Duty, is the top game operator in China with $2.5 billion in revenue in 2011. NetEase (NTES), with which Activision has partnered to offer World of Warcraft in China, is No. 2, with $1 billion in revenue.

Another plus for Santa Monica, Calif.-based Activision Blizzard is the strong reception given to its Diablo III, launched in May; more than six million units were sold in the first week. By some estimates, Diablo could contribute more than five cents a share to earnings this year, not including the profits from an auction house that lets players buy and sell gear for their characters.

As the article points out, ATVI has been a poor performer in recent years, with the price languishing in the $10-12 range even as Activision and Blizzard have racked up huge profits, and the stock market and tech stocks in particular have increased in value. Insert the “fire Bobby” joke here, eh?

Seriously though, do any of you guys follow the stock market, own ATVI shares, and have more hope to profit from them than from finding a really good rare weapon in Inferno? To offer full disclosure, I bought 100 shares in 2008 right at the end of the tech bust for about $9 a share, and it’s been a fairly irrelevant investment, earning slightly more (were I to sell it today) than simply leaving that money in a savings account. (Though a better one than say, lottery tickets.) On the other hand, video game stocks have done quite poorly of late, and if you compare ATVI to EA to Zynga, Bobby looks like a wiz just for treading water.

Tagged As: | Categories: Blizzard, Financial

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  1. This is a perfect example as to why we shouldn’t evaluate a game based on sales. It is a discussion that my friends always make when describing a game and whether or not it will be “good”.

    Diablo 3 did make a ton of money, but it sold a lot based on its name alone. Blizzard made a huge blunder in changing the core aspects of the game such as art direction, skill system, real money auction house, etc. because D3 muddles the water on what fans expected from the Diablo franchise.

    I’m sure the subsequent releases in the Diablo series will do just fine, but they probably will not sell as well as D3 did.

    • It’s also been over a decade since D2 was released, and so a decent proportion of buyers had no experience of D3s precursors. What you’re going on about in your 2nd paragraph, though, I haven’t a clue. Skill system is in absolutely no way core to Diablo – it’s been different in each game. Art style has also changed, and the RMAH is no different to the item trade in D2 except a lot easier.

      • Diablo 3 did a lot more than bringing in profts massively.

        D3 does exactly what D2 did in introducing newer on line mechanics.

        The gold economy was a flop in D2. Blizzard analysed it and reworked it for their MMO.

        2 things were tested and are great data mining tools : the functioning and operational control of an in game RMAH and a gigantic set up of one server cluster for each region.

        Both new 2 things met some problems, but they are a great testing ground for their new MMO.

        Gone will be the days of small populations on single server play and an economy that is fragmented over 500 people playing them.

        As such Diablo 3 succeded in every way: huge unexpecteed sales and enough data sampling to implement the one central server play and the controls of a RMAH / GAH combo.

        Once a player has opened the experience of an RMAH, he will no longer want to go back to meaningles non convertable Gold economies,

        • More like, once a player has opened Diablo III.exe he will no longer want to go back to the game store for another Diablo game.

          • As if your personal opinion even counts.

            COD gets a 2.2 on Metacritic and it outsells everything every year on every platform.

            You simply have no idea what the market strategy for a game like D3 is really.

            This is not an MMO, as such it is simply the next game alongside SC2 on BattleNet.

          • @ Thrall: Everyone’s opinion counts. That’s called Democracy. (Never leave your home without it!) And at the moment – in general, not only gamewise – Democracy is clashing with Capitalism(tm). And the latter really wants to tear the former down like an old advertisement for a product not sold anymore. Ok, at least we know, on which side you’re on…

        • Lol, the president of the company doesn’t write a letter of concern to players two months after release because everyone is just really enjoying the game. He WOULD do it, however, if it was apparent that people were -not- enjoying the game– something that only they could really know for sure to begin with.

        • D3 is a commercial loser – the stock was 13 the day it was released, 11 the evening earnings came out.

          The nasdaq is up over 5% in the same period.

          The paid shills try to spin it, but stocks speak truth, D3 was the big question for ATVI this quarter. Skylanders was a pleasant surprise to ATVI investors, D3 is a stinker.

  2. I bought some EA a while back. It’s dropped about 50% since then. I usually try to steer clear of the video game market. That flop just reminded my why.

  3. I hope they are happy with their sales figures, but this was the last Blizzard game I will buy blindly. Next time I will hold on to my money until I know for certain I am getting the product I am expecting.

  4. You may not like Kotick, but what this guy delivered in 20 years of managing a game company is incredible. He took an ailing Activision and turned it into the most profitable independant game publisher.

    The man knows exactly what sells and he is just a manager not a gamer.

    Some examples where he was right:

    – setting ONE standard in the FPS market. Everyone declared the man insane when he wanted to concentrate an ALL in one gaming franchise: COD with a yearly launch and supported by 2 -3 developpers to publish the next shooter.

    COD is a standard, no easy feat with consoles that crawl with middle aged graphics.

    – making on line games as a first priority. The Elite COD service is clearly a development taken over from the mmo subscription market, but it works as a money maker.

    – players want to play the same game and stay playing it. the examples were already there in the past, but Kotick assembled everyone to support it on a yearly cycle.

    – ignoring the casual market when everyone declared the Facebook Zynga games would kill everything. But one year later Kotick was proven right: the facebook and casual web games imploded. They no longer grow and their money flow dwindles faster than WoW subscriptions.

    That being said: I really think the next 3 big things From Bobby will come from his 2 independant development houses: Bungie and Blizzard. His secret is simple: give independance and make a collaboration with great production houses, but use and implement cross marketing techniques.

    EA does the exact opposite: they buy software houses, integrate them with the suits and merge them in grey boxes to spit out copycat products (from FPS to MMO’s to Facebook and I Pad games).

    You may all dislike the man, but Blizzard did stay as an independant publisher of its own games and Bungie will do the exact same. Kotick knows he is only the suits man. Someting EA managers never understood.

    • I don’t think anything could justify even the slightest acceptance of Kottick after reading: http://www.teamliquid.net/forum/viewmessage.php?topic_id=128252

    • thrall, if you’re going to shill, at least get the facts right.

      Bungie isn’t wholly owned by ATVI. They just signed a one-time deal with a time limit.

      Conflating the two is either stupid or deceptive.

      • And Blizzard is STILL publishing its own games with BLizzard on it.

        I will give you 10.000 dollars if you find me a Blizzard game box with Activision printed on it.

        But spare the effort: you will not find it. Blizzard publishes its own games, it has its own and seperate profit financial tables and it has its own CEO. Not even franchised products like the Warcraft card game are out of control of Blizzard. You won’t find ANY mentioning of Activision on a Blizzard game>.

        It shows the inner workings within the Activision Blizzard group is totally different than the EA (swollow and merge it all up) politics. Bungie is just another example of this co working.

        • So, to be clear, thrall – it is your belief that Blizzard is not a wholly owned part of ATVI, and that Bungie has a business relationship with ATVI which is the same as Blizzard’s? And this is all because Blizzard’s marketing avoids the ATVI logo, etc. Fascinating. Amazing how paid shills can slip right off the edge from bias into pure fantasy.

  5. Fluxybaby: Sell and buy Coca Cola.
    A friend.

    🙂

  6. Yes they are big, like Dinosaurs.

  7. I’m not so sure the future is so great for ATVI stock. They might highlight their sales figures but the general trend for them as a company appears to be going down with regards to all of their big brands. WoW continues to shrink, D3 won’t support nearly the number of sales for the expansions and the RMAH can’t sustain itself without a regular player base, CoD hasn’t done enough to sustain itself forever, and I’m not seeing them put out any new product lines that will replace what they are losing.

    They might continue along with marginal successes with some of their big title releases but I foresee changes being necessary if they’re to maintain their position.

    Captch: Chance of rain 😛

  8. I bought ATVI back before the Starcraft 2 launch thinking it would spike. I think my broker told me we ended up getting it at 12 something so I ended up buying high and though I’ve seen it up to around 14 it has fluxuated little. Dividends are okay, but I saw a report saying it may jump 50% but once again like you said how reliable is that?

  9. Been a shareholder since early 2008, since they seemed to really have their act together with a bunch of guaranteed profits on the way at the time. Purchased at something like $13, and… yeah, wonderful investment. I’ve been underwhelmed by the performance and opted to vote Bobby out at the last elections, but unfortunately a bunch of investors seem to really love treading water. All I can pray for now is that they’ll be sold and I can recoup enough to cover commissions costs.

    As someone said above, Bobby brought ATVI from ailing to stable and is a great manager, but ATVI doesn’t need Bobby anymore. He’s done his job, and should be given a nice golden parachute, but this is an incredibly profitable company, and the shareholders should be seeing a slice of that pie. I’ve thought for a while that he’s just keeping the seat warm for the next CEO who will bring ATVI to the next level, but that seat doesn’t seem to be getting any warmer. I understand that stability is very desirable in this economy, but come on, this is a company that has been recession-proof for the most part.

    At any rate, I still will stay a shareholder for a while (longer than I want!), and I’ve had great dealings with investor relations when I see ATVI/Blizzard doing something wrong. Nothing particularly relevant now (mostly back in the early RealID days), but its a far more effective communication channel than posting on a forum and begging for a blue to pay attention, as long as you realize you’re not dealing with game devs or CMs.

  10. So because most stockholders and experts in the stockmarket are idiots.. you want Bobbi fired? This is a rough economy and the company is still making money? The Stock Market is a big scam and anyone w who thinks they can profit off it is dreaming.

  11. offtopic: flux: any idea when the barbarian podcast is going to be posted?? 🙂

  12. The video game industry, especially for consoles/PC, is in the crapper right now due to various reasons like mobile games.

    I know people joke about Bobby and ATVI all the time, but they’re doing well compared to a bunch of other companies which are not. Yeah, it might not last forever and it could tank, but for now, seems decent at least.

    Blizzard has the WoW expansion coming up in a month and my guess is they’ll announce whatever project Titan is in 2013… in addition to whatever Activision proper has in the pipeline.

  13. When your goal is to please investors instead of make good games, you’re eventually going to fail at both.

  14. I would be very hesitant to buy ATVI stock. The age of the subscription-based MMO is likely at an end, or severely diminished, and World of Warcraft contributes a huge portion of ATVI revenue, and more importantly, huge profit as its operating margins are insanely good.

    In other words, I find the risks to ATVI’s profits very high, as the mass MMO market disintegrates. I don’t think Titan will match the gaping hole that WoW leaves behind.

    • WOW MOP will sell an incredible number of copies.

      And the WOW franchise future was never looking better since ALL competition just went free to play.

      The good thing, these competitors already used/consumed ALL available Lores and put them in a losing bag against WOW.

      Star Trek, Conan, Lord of the Ring, Star Wars, DC Comics, Warhammer, … how much more Lores can you wake up to call it the “next big thing”.

      There is no longer any competition coming out in this subscription market. And WOW is having the market all to its own in about 2 months time.

      Add Pokemon, Farmville and cross server open world play and how would this ever be tackeled in the next 3 years ?

      By forum posters on hate language ? LOL.

      Laughs. 10.000.000 copies of D3 in 2 months time laugh at you.

      • Oh, I forgot. You know everything and are always right. (How often have you told us this…) You’re god and we’re just dust under your boots. (Do you need your boots?)

        What do you think one would find, if one would take a closer look at the ip-adresses you’re posting under? How high would you set the chances that they are not in an ip-range found to be rented to either Vivendi, Activision-Blizzard or a subcontractor of the marketing biz? I know you know the answers 😉

        edit: A piece of advise that may be of importance to you in the next three months: Know thy drugs!

  15. The link that Steveman0 posted hit the nail right on the head. A very interesting read.

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