On Wednesday, November 10th, Activision Blizzard (WoW, CoD) was for some time no longer the most valuable gaming company in the USA. The game Roblox, popular among children and teenagers, had a strong boost in its market value and surpassed the struggling company Activision Blizzard.
How is the most valuable gaming company in the USA measured? The “value” of a company is determined by the prices on the US stock exchange Nasdaq. By multiplying all outstanding shares of a company by the current stock price, you get the value of a company on the stock market, the market capitalization.
As the US site Gamespot reports, there was a point on Wednesday when the market value of the largest gaming companies in the USA looked like this:
- Activision Blizzard was worth 52 billion US dollars
- The company Roblox was worth 62 billion US dollars
- Electronic Arts stands at about 40 billion US dollars for comparison
However, the situation did not last long – as stock prices fluctuate greatly and the value of Roblox dropped by nearly 18 billion US dollars within a few hours.
We extensively covered the future of Blizzard on MeinMMO:
Roblox stock rises temporarily by 42%
Why is Roblox doing so well?
Roblox is a gaming platform, primarily aimed at children and teenagers. The game has grown significantly in recent years and is now huge. It is referred to as a “new Minecraft.”
The company has only been on the stock exchange since March 2021 and is becoming a favorite among investors. On Tuesday, extremely strong company profits were presented in an earnings call: The company far exceeded expectations for Q3 2021. The stock market reacted euphorically – especially since everyone is talking about the “metaverse” without knowing what it actually means.
- On Tuesday, the stock price rose by 42% – a surge that created billions in market value.
- However, on Wednesday, the stock lost another 13% in value after the market corrected downward.
At the moment, the market value is again “only” 44 billion US dollars.
Activision Blizzard loses over 28 billion US dollars
Why is Activision Blizzard not doing so well anymore? Unlike Roblox, Activision Blizzard has lost significant market value in recent months:
- On February 12, 2021, Activision Blizzard reached its peak value of 80 billion US dollars
- Today, on November 11, 2021, the market capitalization stands at 52 billion US dollars
The stock value of Activision Blizzard has significantly declined after the last financial report. While the company’s results, especially due to Call of Duty, were good – Blizzard had to postpone Overwatch 2 and Diablo 4. This lowered investor expectations for the upcoming quarters and consequently the stock price.
Blizzard postpones release of Diablo IV and Overwatch 2 – likely to come in 2023
