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Archive for June, 2010

Activision Blizzard (ATVI) update #15—E3 interviews provide insights to the future

Posted by intelledgement on Sun, 27 Jun 10

A couple of interviews with managers of our game publishing company, Activision Blizzard (ATVI), conducted earlier this month at the Electronic Entertainment Expo in LA shed some light on where the company might be going over the next year and beyond.

The first interview, conducted by CNBC reporter Julia Boorstin, queried company CEO Bobby Kotick about the status of products for motion sensor game machines (Activision Blizzard is not announcing any at E3, but some are in the works), extending the “World of Warcraft” (WoW) subscription model to online play of other games such as “Call of Duty,” “Starcraft,” and “Diablo” (Kotick was noncommittal), and why ATVI continues to pour so much energy into the music game sector despite a drastic dropoff in sales (Kotick believes the addition of many more musicians to the mix of available content will reverse the downtrend).

The second interview, conducted by The Motley Fool analysts David Gardner and Matthew Argersinger, elicited answers from COO Thomas Tippl about some of those same topics, plus what it’s like to work for Bobby Kotick (fun), the future of WoW (it will still be a big thing in ten years so long as Blizzard keeps updating the content), gaming in the cloud (still not suitable for graphics-intense games such as “Call of Duty”), among others.

And speaking of TMF, on a semi-related note here is a risk analysis assessment of ATVI by Jim Mueller they published recently which we read with interest. We generally agree with the Mueller’s assessments, although we do think he is too optimistic to assert of the stock that “there really aren’t any binary outcomes, such as drug approval, that can affect it.” What about the Chinese authorities shutting down WoW for seven months so they could re-approve it? What about the potential for an unfavorable ruling in the “Call of Duty” suits potentially leading to heavy damages and/or loss of control of the franchise? What about the possibility of regulations limiting the sale or use of video games with a violent theme? Mueller’s conclusion—that ATVI has only low-to-moderate risk—is right on…or so we believe, at least.

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