Another day, another big news item for ATVI. The sixth iteration of Call of Duty has brought in $1,000,000,000 in revenue since it was released in November. Yes, this is a record for video game sales. ATVI is trading higher on the news, as opposed to yesterday when it was trading lower on approximately the same news released from Electronic Arts’ perspective.
Yes, the video game sector on the whole is weak. But to reiterate the points made in our initial Activision posts (I, II, III), ATVI is in a great position relative to its competitors because their franchises are ones that consumers want to buy. ATVI’s underlying financial numbers look great, and they have a product line that consumers will purchase regardless of any changes in their discretionary income. While discretionary spending may be down in the last 18 months or so, consumer demand for quality products remains high. As such, we will continue to see trends like CoD:MW2’s success, or the success of Avatar.