Activision Blizzard Gets Huge Forecast Bump Thanks to Overwatch

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Steve Anderson
The Video Store Guy
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Activision Blizzard Gets Huge Forecast Bump Thanks to Overwatch

Just when you think a company has a lock on its future, owning the biggest massively multiplayer online role playing game (MMORPG) experience in the market, along comes a whole new shock just to make sure you're paying attention. Activision Blizzard found just such a fate waiting, and its stock price and revenue forecasts have reflected this.

Most of the gains are thanks to one game: Overwatch. Proving to be the new World of Warcraft, this online shooter is starting to fuel esports hopes and a whole lot of Let's Play videos. Seriously; hit YouTube and look for "Toxic Overwatch Players." There are tons of these and some of them are hilarious.

The numbers are impressive by any standard: Adjusted profit is up to $1.88 per share, from its original level of $1.85. Adjusted revenue forecasts tacked on an extra $30 million, going from $6.3 billion to $6.33 billion. That's following an adjusted revenue hike from $908 million in the first quarter of 2016 to $1.2 billion in the first quarter of 2017. Thomson Reuters noted that analysts were looking for $1.09 billion, meaning Activision was better than $100 million ahead of expectations.

Going into those numbers was word like revenue from digital operations was up 50 percent over the previous year, as gamers appear to increasingly approve of digital downloads as opposed to physical discs. We've discussed this point before, and while there certainly are reasons to enjoy digital download, that's still going to be a spotty and slow-going option for some time to come.

Activision is also diversifying its operations, adding not only esports--which makes sense given many of Activision's offerings--but also consumer products and a film studio for perhaps turning some of these impressive new gaming offerings into halfway decent movies for a change. Considering how Warcraft turned out as a movie, that may not end well; its Rotten Tomatoes rating--an aggregate of reviews from critics and consumers alike--is running a 28 percent overall, but the audience score gives it a 71 percent, which suggests a fairly standard dichotomy between the professionals and the audience.

Perhaps Activision has learned the value of diversification; there's a good reason for this. After all, putting your hopes and your budget on one tentpole operation is awesome until the tentpole shears in two. Spreading things out helps ensure that nothing becomes bet-the-company important and allows a business to better weather downturns. That's a good attitude to have overall and one that should provide some valuable stability for the company.

The future looks good for Activision Blizzard thanks to a growing respect for diversification in operations, and the numbers tell a story of a company branching out.

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