ATVI Video Games No Longer Only for Children
Activision Blizzard, Inc. (NASDAQ:ATVI) stock is a name synonymous with hours of endless video game entertainment. Growing up in the 80s, I can boast of playing on such consoles as the “Commodore 64,” “Atari 2600,” “Nintendo,” and “Sega.” I was a gaming addict and I loved every minute of it.
The development of better game play, better graphics, and more complex comprehensive remotes only fuelled my love for gaming. Being a gaming aficionado carried a social consequence, though; I was ridiculed for it. The good news is that a lot has changed since then—and all for the better.
Activision Blizzard publishes and develops an array of titles that can be played on a number of consoles and devices, including smartphones. The company’s products are available at retail outlets and can be downloaded off the Net.
Gaming is now a cultural phenomenon that is here to stay. This phenomenon has been fruitful for Activision investors, as ATVI stock has recorded a 300% return since January 2013. On top of that, the evidence supports the prospect of further gains ahead.
ATVI Stock and Changing Demographics
Binge-watching TV and playing video games for hours on end has become the norm. It is no longer frowned upon to enjoy a good gaming title. And this isn’t just a North American phenomenon; it’s a global trend.
To understand what I am talking about, let’s take a look at the engagement numbers for 2015.
More than half a billion is the average number of users who played a particular game within Activision’s product portfolio. To put that number into perspective, it’s greater than the entire population of the United States.
Plus, not only are more and more people engaging in Activision’s platform games, but they are doing so for longer durations. Forty-two billion hours were spent playing games across all franchises, which falls close to the total hours spent watching Netflix at 42.5 billion. Compare that with 37 billion hours on Facebook and approximately 10 billion hours watching televised sports. It is easy to see that Activision Blizzard is the 800-pound gorilla sitting equally alongside Netflix.
Continued Growth for Activision Blizzard Stock
All segments of the company’s business model grew: Activision grew 10% year-over-year, Blizzard grew 23% year-over-year, and King grew three percent quarter-over-quarter.
Better still, all segments are expected to continue to grow. There is a long list of new titles to be released by the company in the near future. They’re projected to fuel further growth. Activision Blizzard also sees new opportunities in e-sports and advertising that may add to the company’s bottom line in the near future.
The company’s King Digital Entertainment PLC acquisition was s smart strategic move by management in the mobile space. If we break down the user numbers, we can really see how the mobile platform provides a huge boost to ATVI stock. King is known for names like “Candy Crush” and brings in 463 million users, a considerable sum. Although not the most profitable segment in terms of revenue, the acquisition has exponentially increased Activision Blizzard’s overall user numbers.
Management has continued to beat earnings and upgrade earnings expectations. Given the company’s track record, I see no reason why this trend will not continue.
ATVI Stock’s Price Performance
Price action has just confirmed a bullish price objective on ATVI stock. The chart below shows a cup-and-handle formation. The breakout is confirmed this week with a weekly close above resistance at $40.00.
Chart courtesy of www.StockCharts.com
The depth of the cup can be used to extrapolate a target price. Using $12.00 as the depth, we get a price objective of $52.00. Support now lies in the $39.00–$40.00 range. ATVI stock is also trading at a new all-time high. Thus, the sky is the limit for this stock, as no overhead price resistance exists.
The Bottom Line on ATVI Stock
Gaming is no longer child’s play. More and more people are engaging in the video game area. It’s a global phenomenon further propelled by the addition of the mobile platform. ATVI stock has confirmed a technical breakout and I’m really bullish on this name.
The trend is your friend and ATVI stock is trending higher.