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Activision: Will Investors Switch Into EA?

In my recent articles, I expected Activision (ATVI) to deliver a significant revenue and EPS beat in Q4, thanks to a strong video game market and a rather soft competitive environment. Finally, the company posted a small EPS beat ($0.94 vs. $0.88) on in-line revenue as it was affected by forex headwinds and probably by disappointing performances from at least one of its Christmas blockbusters.

As "Warlords of Draenor" shipped more than 3M units and "Call of Duty Advanced Warfare" seems to have sold quite well, I suspect "Skylanders: Trap Team" delivered below expectations due to competition from "Disney (DIS) Infinity Marvel" (management acknowledged rising competitive pressures in the category during the conference call).

But the highlight of this earnings release was the initial guidance for FY15, which implied significant downside to consensus estimates both on revenue and EPS ($4.4B and $1.15 respectively, vs. a consensus of $4.71B… Read More …