Equity Report AND Template

More documents

Recommendations

Info

Providing MoreOpportunities forAs players engage with games across a more diverse range of consoles,Activision Blizzard now develops most of their games for all major consoles(PC, PS4 and Xbox One), and Overwatch 2 for Nintendo’s Switch. About thenew generation of consoles (PS5 and Xbox Series X) the company has notconfirmed anything yet, but the company is expected to release its newest06The additional investment opportunities offered throughpurchasable downloadable content have proven to be aneffective way to drive deeper consumer engagement with certaintitles, especially amongst core fans of franchises. This model tends to be more stable and prove to be a goodindicator of true consumer engagement due to their recurringnature. Activision Blizzard has also began experimenting withadditional revenue generating consumer investmentopportunities such as film, television and eSports.Investment intodevelopment/MarketingCapital Markets DevelopmentATVI, trading on the NASDAQ exchange, opened 2019 at theprice of $47.13 and closed the year at $58.40, gaining a totalof 23.9% in 2019.The stock had a robust upwards trend throughout 2019without any large disturbances. ATVI reported revenues 1%ahead of investors’ expectations and EPS by 4% for FY 19.The upcoming monthly active user drivers such as Call ofDuty, World of Warcraft expansion, Diablo Immortal and newconsole releases alongside the in-game revenues fromcontent expansions and micro-transaction should prove forexciting movements in financial results of 2020.From the table below one can observe that the marketingspending makes up a significant part of ATVI expenses in the lastyears, and although they still are, in the past two years they havedecreased their spending on selling and marketing expenses. The highest increase in selling and marketing expenses wasnoticeable in 2016 and 2017, with $1210 million and $1380million spent respectively, correlated with the release of several oftheir biggest titles. Research and development costs are predicted to increaseslightly as they plan to release several bigger titles later this year. In line with Mr. Kotick’s words, research and developmentexpenses are predicted to increase for the future as managementshifts resources from non-management labour to R&D expenses.Activision Blizzard beat all the EPS targets for its fourquarters of 2019 showing better than expected overallperformance for the FY 19, with strong signs of a continuedupwards trend in revenues for FY 20 with big title releasessuch as Diablo Immortal, Diablo IV, expansion for World ofWarcraft and the new Call of Duty. A strong contributingfactor to the Q4 EPS is predicted to be the shift from an ingameSeason Pass to a better monetizable Battle Pass (asseen in other multiplayer shooter games) and an increasedtransition towards smooth cross platform play. The release of World of Warcraft Classic also had a significantimpact on quarterly Monthly Active Users count, enablingBlizzard Entertainment to capitalise upon the returningplayers with upcoming expansion release
Activision Blizzard beat all the EPS targets for its fourquarters of 2019 showing better than expectedoverall performance for the FY 19, with strong signsof a continued upwards trend in revenues for FY 20with big title releases such as Diablo Immortal,Diablo IV, expansion for World of Warcraft and thenew Call of Duty. A strong contributing factor to thepredicted to be the shift from an in-game Season Pass to abetter monetizable Battle Pass (as seen in other multiplayershooter games) and an increased transition towards smoothcross platform play. The release of World of Warcraft Classicalso had a significant impact on quarterly Monthly ActiveUsers count, enabling Blizzard Entertainment to capitaliseupon the returning players with upcoming expansion releaseDuring 2019, Activision Blizzard released 6 videogames and announced 5 to be released in2020. Although announcement and release dates aren’t always correlated with stock pricemovements, these events usually bring about a surge in stock trading volume and, at times,price movements too. Highlighted in yellow, are the videogame releases & announcementscausing the largest movements on the stock market.
Page 1 and 2: PompeuInvestment ClubEQUITYRESEARCH
Page 3 and 4: CompanyOverviewActivision IBlizzard
Page 5 and 6: Company OverviewBusiness UnitsThe c
Page 7 and 8: EmployeesAs of December 31, 2019, A
Page 9 and 10: CorporateGovernanceHow are they org
Page 11 and 12: Financial OverviewActivision Blizza
Page 13: ExpandingAudience ReachActivision B
Page 17 and 18: SWOTAnalysisWe present a SWOT analy
Page 19 and 20: 3Regulations/PoliticsWhen talking a

Equity Report AND Template

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?