Pacific Crest Raises Activision Blizzard Target By $2 Amid 'Overwatch' Strength

On May 24, Activision Blizzard, Inc. ATVI launched the much-awaited, multiplayer first-person shooter game Overwatch. Pacific Crest’s Evan Wilson maintained an Overweight rating for the company, while raising the price target from $41 to $43. The analyst mentioned that the early reviews for the game were strong.

Early signs had already suggested that Overwatch would be a success after its launch, analyst Evan Wilson noted. The initial Metacritic reviews have come in now, with the PC version of Overwatch getting a score of 94 and the PS4/Xbox One score at 90.

eSports Franchise

“Overwatch has wide appeal with its "friendly" gameplay, short 6 to 16 minute game sessions (allowing for ads between sessions) and custom camera angles specifically for eSports. Success in eSports would drive more engagement and provide a longer revenue stream due to ancillary revenue streams like events, merchandise and advertising,” Wilson wrote.

The 2Q estimate has been raised from 5 million units to 7 million units. The EPS estimate for the quarter has been raised from $0.39 to $0.46. 

Comparing To Other Games

The analyst commented that capitalized software associated with Overwatch could be less than COD or Destiny, given only 6-9 months of capitalization of Blizzard titles. Taking Ubisoft's The Division as a benchmark, Wilson said that it sold nearly 5.5 million units in four weeks. He added that Overwatch is likely to sell faster and has six weeks on the market.