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How 'Call Of Duty' Sales Are Affecting Activision Blizzard

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How 'Call Of Duty' Sales Are Affecting Activision Blizzard

November 4 saw the release of "Call of Duty: Infinite Warfare," one of Activision Blizzard, Inc. (NASDAQ: ATVI)'s flagship titles. The annual release of entries in the first-person shooter franchise usually means big sales for the compnay. So, why are traders feeling so nervous about the stock?

Investors' Anxiety

Speaking on Monday's Premarket Prep morning show, video game industry analyst for Wedbush Securities Michael Pachter believes part of the investor anxiety stems from Activision Blizzard's appeal to generalist investors bench marked against indexes that include Activision. "They were buying it to follow it up because it was hurting their performance," Pachter began. "And as soon as they saw a sign of anything weak, they were the first to abandon the stock."

According to Pachter, part of that weakness came from increased competition and disappointing sales for the publisher's top franchise, which accounts for about 20 percent of overall revenue. "We're getting reports out of the U.K. that sales of 'Call of Duty' were down 40, 50 percent in its opening weekend and through its first week, which makes sense. Last year, it came out with very little competition in front of it; this year, there were two giant, very competitive games: 'Titanfall 2' and 'Battlefield 1,' that came out in the weeks prior."

Misleading Sales Numbers?

However, Prachter thinks the physical sales numbers are misleading and that digital sales will bear out Activision. "We're going to get November physical sales for the U.S. on December 8," he explained. "I think it's going to be bad for Activision, but truthfully, I believe the mix has shifted to full game downloads."

While Activision might take a hit in the short term, Pachter has Activision Blizzard as a favorite in 2017, exceeding its 2016 high.

Listen to the full discussion in the clip below.

PreMarket Prep is a daily trading ideas show that focuses on technical analysis and actionable short term trades. You can listen to the show live every morning from 8–9 ET here, or catch the podcast here.

Image Credit:By Infinity Ward, Inc.; Activision Publishing, Inc. [Public domain], via Wikimedia Commons

Posted-In: Battlefield 1 Call of Duty Call of Duty: Infinite WarfareTech Media Trading Ideas Interview General Best of Benzinga

 

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