At Activision Blizzard, the stock had recently fallen after a sobering financial report. Now it is on the rise again: Responsible for this are the success of WoW Classic, first reactions to Call of Duty: Modern Warfare and rumors of a Diablo 4 and Overwatch 2.
A month ago: Less than a month ago, on August 9, the outlook for Activision Blizzard was bleak. The financial report for Q2 2019 painted a sobering picture for the publisher:
- Nothing significant happened in Q2 – player numbers were stable, but revenues were significantly lower than the previous year
- Activision Blizzard also gave a sparse outlook for Q3, which fell short of Wall Street expectations
- Additionally, President Donald Trump had just warned about violent games
- Activision Blizzard was in a state of upheaval, had laid off employees and had hardly any new games on the horizon
- and somehow there was a sense of danger in the air that trouble could arise due to loot boxes – something was brewing
The stock price of Activision Blizzard fell by 3% after the financial results – they had already come from difficult waters, having laid off their financial chief at the turn of 2019, lost the Destiny franchise, and lost considerable value on the stock market.
WoW Classic makes Activision Blizzard look like geniuses
That’s why everything is different now: In recent days, the tide has turned. Now the positive attributes of Activision Blizzard are emphasized and praised. Analysts suddenly give buy recommendations:
- WoW Classic is a hit, and that for a subscription-based game. Profits are now expected here – the queues, which are so annoying for games, delight analysts. The Twitch numbers are also seen as an important indicator for analysts
- In addition, Call of Duty: Modern Warfare seems more and more like a hit as it releases in October. The first reactions to the PS4 beta were positive, as analysts note
- Moreover, there are rumors of new announcements at BlizzCon for Diablo 4 and Overwatch 2 – these are also being favorably noted
- Furthermore, Activision Blizzard has announced, to disclose loot box chances by the end of 2020 – addressing investor concerns
- 2020 anyway marks the beginning of the new console generation, from which investors expect profits
This is how analysts now see Activision Blizzard: Although not much has changed compared to early August, there is now a different perception of Activision Blizzard.
It is said: All signs point to a surprising turnaround for the stock.
The stock has risen by 7% in the past week, and experts believe the stock still has massive potential. It is still missing 40% compared to last fall.
Here’s what analysts say:
- Analyst Matthew Thornton estimates that Call of Duty will be a hit, also because it faces weaker competition. He believes Activision Blizzard’s earnings per share will rise by 15% – and sales numbers will climb by 10% each in 2020 and 2021.
- According to analyst Michael Olson, World of Warcraft Classic is an important puzzle piece that can lead to accelerated revenue growth for Activision Blizzard in 2019 and 2020.
At the moment, it seems as if WoW Classic will mitigate or even completely end Activision Blizzard’s weak phase.
The irony is that “WoW Classic” is considered a game that Blizzard didn’t even want, but was forced upon them by the fans.
