GAMING BLEND

Activision's Stock Dips, Investors Worry About Lack Of Innovation

By William Usher 2011-11-29 15:43:22 discussion comments
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The most important group of people to Activision are worried about the company...no, not gamers, investors. Investors are twiddling their fingers and doodling their thumbs in anticipation to see what Activision does next as worries continue to mount on the company's thinning portfolio of hard-hitting software.

In a report by Reuters, it appears Activision’s stock is taking a dive and wasn’t enough to maintain the expected year-to-year market value for the company. Investors are now fearful that with very few high profile games on the horizon, Activision could be in trouble.

Basically, the report indicates that Activision’s stocks are down 5.5 percent compared to their performance in 2010. Alternatively, Electronic Arts’ stock have seen a 27.2 percent gain in year-over-year performance.

This isn’t the first time investors have shared concerns about Activision’s business strategies. Not too long ago a report surfaced indicating that investors feared that without Call of Duty or World of Warcraft Activision had no games to sustain their market value. Well, those concerns are surfacing again as Activision continues to lose subscribers in World of Warcraft, 800,000 to be exact, which caused shares to dip even more.

The main concern of investors is that while games like StarCraft and Diablo have market clout, they just aren’t enough to compare to the likes of WoW or Call of Duty and Activision needs to desperately put into motion another (innovative) franchise or two to carry some of the financial weight of the company. Previously, Activision had the Tony Hawk brand and the Guitar Hero franchise to round out a more diverse strategy of maintaining dominance with various demographics within the retail market. However, due to over-saturation of both Tony Hawk and Guitar Hero, both have been shelved.

Some gamers expected that with the purchase of Bizarre Creations back in 2007 Activision would eat into the racing market with a new franchise built around the concept of Blur, however, given that the game released neck-to-neck with Disney Interactive and Black Rock Studios' Split/Second the games kind of cancelled each other out and under-performed sales wise. True Crime: Hong kong didn’t even get a chance to hit the market before Activision canned the project due to an inflated budget.

Activision, so far, has a few games in the pipeline including the long-rumored Titan MMO from Blizzard. There’s also Prototype 2 which doesn’t even seem to create a blip on investor’s radars and there’s also Skylander, which ships with a toy, and has found some pretty good success already, so much so that retailers are running out faster than they can get them in. Activision’s Chief Executive, Bobby Kotick, even stated that…
"(Skylanders) are in high demand. Retailers across the board are concerned that they will be out of inventory well before Christmas,”…”There's nothing we can do because they are made offshore and we can't get product made that quickly”

It will be interesting to see where Activision goes from here…but I’m betting they’re kicking themselves right now for not keeping True Crime as a viable rival for GTA V as well as for not easing off some of their franchises and instead of force-feeding stuff like the Hero series to the market they should have filtered out sequels according to the supply and demand of the franchise.

Anyway, Activision has only seen dips in stocks and market value for now…Call of Duty: Modern Warfare 3 is still selling quite well and breaking records and they have already acquired more than a million subscribers with Call of Duty Elite.
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