Activision Blizzard Analysis

Topics: Video game, Activision, Blizzard Entertainment Pages: 8 (2791 words) Published: March 17, 2013
Market Analysis
Carlos Agis

I. Company Summary
Leading market positions across all game categories, Activision Blizzard is the second largest entertainment and gaming software business in the world by revenue (Reuters Agency). Activision has published some of the best selling console, handheld, and mobile video games such as Call of Duty (Reuters Agency). The company’s second-half, Blizzard Entertainment, focuses on the firms’ pc gaming industry with best-selling games such as StarCraft, and the #1 global subscription-based online multiplayer World of Warcraft (Reuters Agency). Activision sells their products through retail stores such as GameStop and Best Buy, as well as digital download from Steam and Origin (Hoovers). Industry

The traditional video game industry began struggling in 2012 because of the emerging popularity in mobile and tablet gaming. Video game sales slumped to $699.8 million, a staggering drop of 29% last June (Yahoo Finance)! On the bright side, according to gaming industry research firm DFC Intelligence, “the global videogame market will grow from 67 billion in 2012 to $82 billion in 2017” (Yahoo Finance). New console systems expected from Microsoft, Sony, and Nintendo are anticipated to spur the momentum of game sells for the next two to three years (Yahoo). While sales may rise in due course for consoles, the steadiest area of growth is in pc and mobile gaming (Reuters Agency). PC game sales have been gradually increasing with an expected $25 billion in 2017, but the leading driver of growth in the industry seems to be online distribution (Yahoo Finance). Although the emergence of online distribution has shifted and taken away shares from the traditional model of selling “physical boxed” games from a retailer, the revenue from online distribution is expected to barrel in a total of $35 billion dollars by 2017 (Forbes)! By 2017 DFC researchers also forecasted 39% of console game revenue will be through online distribution of the games (Forbes). Activision Blizzard Growth

According to, Activision’s revenue grew 11.54% this last quarter (Yahoo Finance). Thanks to the recent release of Call of Duty Black Ops 2, the company topped $1 billion in retail sales within its first 15 days (Yahoo Finance). Although World of Warcraft, an MMORPG (massive multiplayer online role playing game), accounts for 49% of the company’s annual revenue, there seems to be a slow decrease in subscribers with no room for the game to expand (Yahoo Finance). On the bright side, Activision’s digital division, which offers downloadable content such as add-ons for its games accounted for 51% of total revenues this last quarter (Yahoo Finance). Activision employment decreased by 8.22% this past year, from 7,300 to 6,700 (Yahoo Finance). Due to a 700,000 World of Warcraft online subscription loss this past third quarter, Activision has had to re-adjust their financials (Reuters). According to analyst Arvind Bhatia, “The subscriber base for 'World of Warcraft' is getting smaller so they are adjusting their cost structure for that decline" (Reuters). Let’s not forget, Activision also eliminated 500 jobs the previous year when it shut down its development studios which created “Guitar Hero” (Reuters). Activision’s web traffic has recently been decreasing at a rate of 9.8% in only the past 7 days (Site Ratios). The website attracts around 594 unique visitors with an average of 772 page views per day, a drop of almost 13% in the past month (Site Ratios). In the last month Activision Blizzard has received a global Alexa rank of 25,512, a 4,204 downward shift from their 17,549 rank 3 months ago (Alexa). Key Decision Makers

Robert Kotick| Age:49| 2008| Director; President and Chief Executive Officer. “Mr. Kotick has been a Director and Chief Executive Officer of Activision, Inc. since February 1991 until July 2008, when he became Chief Executive Officer of Activision Blizzard in connection with...
Continue Reading

Please join StudyMode to read the full document

You May Also Find These Documents Helpful

  • Understanding the Strategies of Activision Blizzard Essay
  • Essay on Activision Blizzard Merger Case Study Analysis
  • Activision Blizzard Essay
  • Activision Blizzard Annual Report Essay
  • Vivendi-Blizzard Case Study: a Situation Analysis Paper Outline
  • History of Activision Company Essay
  • Corporate Responsibility Essay
  • Essay about Strategic Management Assignment Unilever and Blizzard

Become a StudyMode Member

Sign Up - It's Free