Activision Blizzard (ATVI 74.99, -2.93, -3.76%) began lower by 3.1%
after shares surrendered their pre-market gain, which took place in response to
a strong launch of the company's latest video game title. Shares of ATVI jumped
5.5% on Friday on the game's release day to reclaim their 50-day moving average (75.74).
The video game publisher and developer, which also owns the Major League Gaming e-sports brand, announced that Friday's launch of Call of Duty: Black Ops 4 set a new launch day record for the company, eclipsing the previous record set by Call of Duty: WWII last November.
In addition to setting a record for the company, online sales of Call of Duty: Black Ops 4 for PS4 set a PlayStation record for day one digital full game sales. The launch day sales for the PC version of the game doubled when compared to last year's release of Call of Duty: WWII.
Call of Duty became Activision's flagship franchise over the last decade, with the company relying on frequent refreshes of the title to deliver strong revenue growth. Over the past couple of years, there was a growing concern in the gaming community that the developers had become too reliant on the game's engine, leading them to make insufficient changes to new versions of the game. However, last year's strong launch of Call of Duty: WWII, now followed by an even-stronger release of Black Ops 4, suggests that developers have been responsive to those concerns and have managed to capably deliver products that can excite and engage the franchise’s base.
Activision Blizzard trades at a price/sales ratio of 8.2x with a forward price/earnings ratio of 26.4x. Competitor Take-Two Interactive (TTWO 125.81, -3.24) has a price/sales ratio of 8.5x and forward price/earnings ratio of 26.2x while Electronic Arts (EA 104.73, -1.37) trades at 6.8x sales with a forward price/earnings ratio of 21.1x. Ubisoft Entertainment (UBSFY 19.86, -0.70), which trades over the counter, sports a price/sales ratio of 6.2x and a forward price/earnings ratio of 29.2x.
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