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Activision Blizzard Analysis

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Activision Blizzard Analysis
Market Analysis
2/18/2013
Carlos Agis

I. Company Summary
Overview
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


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