Posts Tagged 'ERTS'

Modern Warfare 2 Tops $1 billion in Revenue (ATVI, ERTS)

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.

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Interview on Gaming Sector (ATVI, ERTS, GME)

I stumbled upon this interview with Colin Sebastian, an expert in interactive media, during my morning reading. He echoes some of the sentiments I expressed in my original ATVI summary. Here’s a quick excerpt of the excerpt:

For Activision, it really boils down to the predictability of revenues and high margins compared to many other game publishers. World of Warcraft and Call of Duty are two of the largest entertainment franchises right now, and we don’t see any signs of these games slowing down. In 2010 Activision will bring to market the sequel to one of the most popular PC games of all time, called StarCraft II. They have an expansion pack as well for World of Warcraft in the second half of the year, and the next iteration of Call of Duty. Keeping in mind that this year’s version, called Modern Warfare 2, is on track to become one of the largest entertainment franchise of all time, we expect a billion dollars in retail revenues for the game.

The full link has some other interesting thoughts on ATVI as well as ERTS and GME that might be useful for someone interested in getting into the video game sector right now.