Activision Blizzard Inc. ATVI is set to report second-quarter 2016 results on Aug 4. Last quarter, the company delivered a positive earnings surprise of 90.00%. The company has delivered positive earnings surprises with an average beat of 61.51% in the last four quarters. Let’s see how things are shaping up for this announcement.
Factors to Consider
Increasing digital revenues and continued strength of the Call of Duty title should cushion earnings in the second quarter. Also, the company announced that its newest franchise, Overwatch (released on May 24, 2016) has crossed 10 million users as of Jun 14, 2016. The company is contemplating creating a league for this franchise, which could serve as a new revenue stream.
More importantly, the acquisition of King Digital seems to have paid off as reflected in the solid results of the last quarter. The buyout was a ploy to enter the lucrative mobile games market where so far Activision has had a limited presence. Moreover, it adds a sizeable female user base to its hardcore male dominated gamer base. With 544 million users, Activision Blizzard has surpassed Twitter and Instagram.
Activision launched its first movie Warcraft (Jun 10, 2016) based on its super hit video franchise World of Warcraft. However, the movie, despite terrible reviews and a bad show at the domestic box office, has managed to...