Categories Earnings, Leisure & Entertainment

Can Activision Blizzard play on new releases, subscription growth in Q4?

Activision Blizzard (NASDAQ: ATVI) brought cheer to fans last year with a slew of new game launches and updates, after forecasting a marked increase in net bookings for the fourth quarter. The video game publisher is expected to report an 8% drop in fourth-quarter earnings to $1.19 per share on revenues of $2.67 billion, which represents a 6% decline. The results will be published on Thursday at 4:05 pm ET.

Among the latest releases, both the regular and mobile versions of Call of Duty: Modern Warfare have been doing well, which is expected to add to revenue growth. Another popular franchise that might have contributed to the top line is Descent of Dragons, which is the latest expansion of Hearthstone, and its free standalone version Battlegrounds.

Related: Activision Q3 2019 Earnings Conference Call Transcript

New Releases

Though the initial response to the World of Warcraft expansion was not encouraging, it gathered momentum towards the end of last year. After registering record subscription growth in the last quarter, the Classic version of World of Warcraft likely maintained the momentum in the December-quarter.

Future Perfect

In the long-term, the key to achieving stable growth is to expand the user-base further by offering more free-to-play games based on popular franchises. The management’s eSports push, with focus on tie-ups, also bodes well for the company.

In the third quarter, revenues declined 15% to $1.28 billion, resulting in a 10% fall in earnings to $0.38 per share. The results, however, exceeded the market’s forecast, triggering a stock rally.

Gaming World

Last week, Electronic Arts (EA) reported double-digit increase in third-quarter earnings and revenues, mainly on the strength of its live services and downloads, which was partially offset by weakness in the mobile segment. However, the results fell short of expectations. Last year, the gaming world witnessed several new players entering the already crowded market, which would definitely be a matter of concern for market-leaders like Activision.

Also see: Factors likely to influence Zynga’s Q4 results

Analysts’ average target price on Activision shares represents an 11% upside from the last closing price. The majority of the market watchers recommend buy, expecting an uptick ahead of the upcoming quarterly report. Activision shares have been gaining steadily since early last year, after slipping to a multi-year low. Meanwhile, it witnessed volatility in 2020, after starting the year on a positive note.

Also Read:  DocuSign (DOCU) reports a 45% revenue growth in Q2 2021

Listen to publicly listed companies’ earnings conference calls along with the edited closed caption text

Most Popular

COVID-19 drove retailers up the digital path years ahead than anticipated

Earlier we looked into how, during the COVID-19 pandemic, retailers saw changing trends in terms of their assortments and how the acceleration of online shopping led many of them to

Snowflake (SNOW) creates a record as the most successful software IPO ever; stock more than doubles

Data is at the heart of business innovation. Recognizing this trend, companies are seeking ways to transform their businesses by capturing, analyzing, and mobilizing data. The public cloud is becoming

Adobe (ADBE) sees new tailwinds as virtual shift gathers steam

The second half has been highly rewarding for design software maker Adobe Inc. (NASDAQ: ADBE) amid stable demand for digital content solutions. The company has remained unaffected by the virus-related