ATVI, Modern Warfare, and WoW
Activision, purveyors of such awesome games like Call of Duty, Modern Warfare, and Guitar Hero, despite beating analyst estimates and raising forecasts, saw its shares plummet today by almost 7% as the market voiced concerns that its World of Warcraft subscriber base will continue to fall.
Apparently WoW drives 44% of Activision’s sales and is its largest business, hence all the hubbub over its subs drop from 11 mil to 10.3 mil, but with Modern Warfare 3’s release causing all kinds of pandemonium just before Christmas, is ATVI a buy?
Any Modern Warfare fans here? To be honest I haven’t played it since Lehman went belly up but nevertheless, I think I know awesome when I see it, and the Modern Warfare series is pretty much the bee’s knees if you ask me.
The figures seem to agree: all the older versions absolutely killed it during their opening days, Call of Duty itself went on to become the highest selling game of all time, and to no surprise, analyst projections for the new edition looks en route to do the same; 6 million copies sold by tomorrow, over a billion dollars in sales for the next 6 weeks, and 18 million copies sold by the end of the holidays. These, coupled with their launch of Call of Duty: Elite, is definitely nothing to sneeze at – even if only half of it comes true.
That argument however completely ignores WoW’s importance to AVTI, and as mentioned earlier, it’s a huge chunk of their business – and the chunk which the bears are zeroing on right now. They argue that EA’s Star Wars: The Old Republic coming out next month would throw a monkey wrench into whatever turnaround Activision’s planning for WoW, saying that its release would further damage its already ailing subscriber base.
Now that part I know less than nothing about, but I know that a lot of the monkeys here are serious WoW and Star Wars fans so I’m throwing the ball to you nerds guys instead:
Can a new Star Wars game kill World of Warcraft? And in turn, Activision’s share price?
Or will Modern Warfare 3 make up for all of it?
Curious what you guys think.
Guild Wars 2 could be a further monkey wrench. It'll be released next year.
SC2's doing good as well, especially with the new expansion coming up next year
diablo 3 is gonna pull people away from WOW. have to wait for that as well.
I loved blizzard when i was growing up. I wasn't a huge fan of SCII and am holding out hope on D3, but am starting to lose it. I see ATVI as trying to suck every dime out of players at the expense of the games themselves. COD is the perfect example they come out with a different version every year with little to no changes. Yet my brother and millions of others will drop $60 on them and then pay for the DLC later.
I dont see WoW going down for awhile the latest expansion sold 3.3 million on the first day. The thing is the ultimate cash cow and ATVI is going to milk that baby until its ran into the ground.
In other words i like ATVI the stock, but hate the company.
agreed. and they stopped offering beta a long time ago good thing with SC2 is u don't need to pay a monthly fee
Short ATVI, they hit their peak and now they can't possibly grow anymore.
Short Apple too. They've got maybe 24 months left of Steve Jobs' products and then it's all over.
Long Amazon.com, Bezos is the man.
WoW was their $15/month cash cow and they're bleeding subscribers because the game is getting stale. The outlook doesn't seem good either. They're planning on releasing a Panda world expansion. They have to be running out of ideas. Starcraft and Diablo won't make up the $15/month and Diablo will probably pull even more players from WoW. I stopped playing games, but Diablo is looking interesting.
Sure, the new MMOs coming out will eat into the subscriber base of WoW as people get tired of it and look for something new. I do not believe, however, that Diablo 3 will necessarily eat into the WoW subscriber base. Diablo 3 will have player versus player online modes, but I doubt it will even come close to catering to the same crowd who enjoys WoW. Think the people that like Call of Duty but want to try something different and use swords and spells and shit will also be the market for Diablo 3, whereas WoW caters to the ultra nerds. This parallels to the fact that buyers of games like Assasins Creed are often the same people buying CoD games and Battlefield.
I am also confident that if and when they need to pull the plug WoW, when it is no longer profitable, they absolutely will. Just look how fast they pumped and dumped the Guitar Hero franchise. In the meantime, they will continue to milk the cash cow.
The real question is, is Diablo 3 being a great success already priced in?
I wouldn't count WoW out just yet. Every single time those guys at Blizzard come out with anything for it, folks just gobble it up. I've never actually played it, but I can't see it becoming stale anytime soon.
The thing is, with cash flows so dependent on those hit titles and habits of gamers being unpredictable, it's the same problem as with those movie futures that Midas talked about. How would you really know what will be a hit or not, and by extension, whether to buy or sell?
Don't forget that Counter Strike: Global Offensive is also coming out soon.
My experience has been that a good number WoW players also enjoy CS.
This is not a real CS as CS1.6 or CSS. Global Offensive will be a piece of shit.
Any thoughts about the Diablo 3 real $$ auction house? I can see that boosting profits a bit...
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