Activision Blizzard sank 4.8% after reporting lower than expected earnings and sales expectations for the current quarter. The video game maker says it needs to invest in its core business to face the fierce competition from some online games like ‘Fortnite’ or ‘Apex Legends’. Activision has announced that its game ‘Sekiro’, launched last March, has already sold more than 2 million copies in less than 10 days worldwide.
The company recorded first quarter adjusted revenues of $1.26 billion. Net income fell to $447 million, or 58 cents a share, from $500 million, or 65 cents a share a year earlier. Activision is talking about a year of transition, while 800 jobs have already been removed. It has nevertheless reiterated its forecasts for the full year, with adjusted earnings of $2.10 per share and revenues of $6.30 billion. Analysts expected earnings per share of $2.18 and a turnover of $6.41 billion.
Activision previously announced that it would expect a much lower financial performance from Blizzard this year as 2018 took advantage of the release of “World of Warcraft: Battle for Azeroth”.
Electronic Arts was down 2% to close Friday at $92.50. MKM Partners has lowered its “buy” opinion to “neutral” Electronic Arts because the game ‘Apex Legends’ could have been full of buyers according to analysts. Remember that the American giant of video games had announced that this title, new “Battle Royale” from Respawn Entertainment, had a huge success since its launch last February. Eric Handler’s downgrade came amid an $8 raise in target price. The analyst now sets $100, above the mean of $102.92.
“The initial success of ‘Apex Legends’ in 4QFY19 likely created a head fake where early, upward revisions of FY20 Street forecasts may have been too much, too soon as player engagement has meaningfully declined in the last 10 weeks. Our key issue with the game is that as a story-driven game it will not have a multiplayer component and there will be no microtransactions, thus eliminating recurrent revenue spending,” he wrote.