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Video Game Roundup: Activision's Destiny Creates New Sales Record

Zacks Equity Research

The countdown to holiday season just started for avid gamers, after Activision Blizzard (ATVI) released its highly-anticipated shooter title Destiny. As a new game, Activision’s most expensive intellectual property (IP) raked up $500 million on the very first day, creating a new sales record. (Activision's Destiny Generates First Day Sales of $500M)

Among the prominent U.S. game developers and publishers, Activision has the best product pipeline for the upcoming holiday season. The company is set to launch World of Warcraft: Warlords of Draenor, the newest expansion in the epic franchise, reportedly which has already been pre-purchased by over 1.5 million subscribers.

In October, the company intends to launch SkyLanders: Trap Team. The November, release of its blockbuster franchise Call of Duty: Advanced Warfare presents a significant growth opportunity for the upcoming holiday season. Both Electronic Arts (EA) and Take-Two Interactive (TTWO) have postponed their much-anticipated games Battlefield and Evolve to 2015, which will benefit Activision.

Video Game Market – Other Stories

Reportedly, Microsoft (MSFT) is planning to acquire Minecraft maker Mojang AB. The tech giant is expected to bid $2 billion, which is quite a heavy price for a video game developer. Despite being 5 year old, Minecraft’s growing popularity is the primary reason behind this valuation. (Will Microsoft Acquire Minecraft Developer Mojang for $2B?)

Electronic Arts recently stated that it will remove Ray Rice from its Madden NHL 15 game, after the National Football League suspended the player. The Baltimore Ravens running back was found assaulting his wife in a video that resulted in the suspension. EA released NFL 2015 in August.

Glu Mobile (GLUU) recently expanded its agreement with Hollywood celebrity Kim Kardashian West for another three years, which is now scheduled to end on Jun 30, 2019. Glu Mobile’s Kim Kardashian: Hollywood has been one of the most successful games recently. The game helped Glu Mobile to achieve new single-day records for overall revenues, downloads and daily active users (DAU.V).

China-based video game developer, Perfect World (PWRD), recently announced that it will sell its stake in Shanda Games Limited to Shanghai Buyout Fund.

Game News:

  • EA released FIFA 15 demo version, NHL 15 and The Sims 4

  • Glu Mobile recently launched Racing Rivals 2.0 on Facebook’s app center along with Apple’s app store and Google Play

  • Zynga (ZNGA) launched NFL Showdown and Zynga Poker on Apple’s app store and Google Play

  • King Digital released Diamond Digger Saga on iOS and Android platforms

Performance

Over the last 5 days, Glu Mobile was the leading stock as it added about 6.33%. NetEase has been the biggest gainer in the last 6 months, with EA a distant second.

Glu Mobile’s recent game releases have been the primary growth factor for the stock. However, Zynga continued to lose during the period, primarily due to intensifying competition, from the likes of King Digital and less-than-impressive product pipeline.

Stock Price Chart (as of 9.11.2014)

Last 5 days

Last 6 months

ATVI

0.34%

15.87%

EA

1.87%

26.88%

MSFT

3.84%

22.81%

NTES

-1.20%

31.11%

GLUU

6.33%

-2.18%

TTWO

5.22%

14.00%

ZNGA

-2.65%

-49.22%

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