Activision Blizzard Can Sort of Make You Rich

After a couple of delays, there's now some real money to be made -- and squandered -- playing Activision Blizzard's (Nasdaq: ATVI  ) Diablo III.

Yesterday's launch of the real-money auction house will give players the ability to buy and sell (using actual money) the virtual goods that they find during the course of playing the online game. This could be a game-changer for Activision Blizzard, since it takes a 15% cut of the transactions when gamers decide to cash out.

Diablo III's marketplace was supposed to roll out a week after the game became available last month, but server outages bumped the launch twice. Yesterday's launch is restricted to the Americas game region for the U.S. dollar, Australian dollar, and Mexican peso. Other countries and currencies will come online later.

It remains to be seen where supply and demand will meet here. After shelling out $60 on the game, logic would suggest that most gamers are interested in making some of that back by being sellers instead of buyers. There are also reports of players in emerging markets treating this as a full-time endeavor, and that's another development that will likely drive prices lower in what should be a buyer's market.

It also remains to be seen if the marketplace will attract or dissuade gamers. The sale of virtual loot in massive multiplayer games has been going on for years, but here we find the actual company behind the game cashing in. If gamers feel that this will give rich gamers an unfair advantage, the experience may prove to be less than ideal for most of the players.

Activision Blizzard needs this to work. It hasn't been as aggressive as its nearest rival -- Electronic Arts (Nasdaq: EA  ) -- when it comes to the fast-growing niches of casual and social gaming. Yes, Zynga (Nasdaq: ZNGA  ) has seen its stock cut in half since going public six months ago, but social gaming is still growing in popularity on social networks and as smartphone apps. Traditional video games have been sluggish since 2009.

Hoping to make up for lost time, Activision Blizzard is also teaming up with analytics firm Flurry to launch a third-party publishing platform for mobile games. It remains to be seen what app developers can gain by going through the Activision Publishing gateway instead of striking out on their own, but at least the company's trying.

Continue?
Digital delivery is the inevitable future of gaming. The industry is moving that way. The next trillion-dollar revolution will be in mobile, but the best investing play isn't necessarily Activision Blizzard. If you want to cash in on the hot trend, a new report will get you up to speed. Yes, it's as free as this article, but it won't last forever, so check it out now.

The Motley Fool owns shares of and has written calls on Activision Blizzard. Motley Fool newsletter services have recommended buying shares of Activision Blizzard, as well as creating a synthetic long position in Activision Blizzard. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.

Longtime Fool contributor Rick Munarriz calls them as he sees them. He does not own shares in any of the stocks in this story. Rick is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.


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  • Report this Comment On June 13, 2012, at 3:23 PM, TMFDukenewkirk wrote:

    "If gamers feel that this will give rich gamers an unfair advantage, the experience may prove to be less than ideal for most of the players."

    D3 is not like WoW in that it's more like a single player game you can play with buddies, it's not an MMORPG where you stand to gain anything substantial by being better equipped than the other guys, therefore, that point above is irrelevant. Nobody should be alienated by the presence of this real money auction house.

  • Report this Comment On June 14, 2012, at 4:24 PM, CNQFool wrote:

    Yes, however if you and your buddies want to stand a chance at surviving and completing "Inferno" difficulty in the game you will need to spend a tremendous amount of time getting the gear required to do so. This is why currently there are some players who are spending thousands of dollars on equipment for their characters. Some single items have sold for the maximum amount set by ATVI at $250 each. You also forgot a key part of their income strategy as well where they charge $1 for every single transaction whether an item sells for $250 OR $2. Being a player of Diablo, Diablo 2, World of Warcraft, Diablo 3 and an investor, I am putting my money on ATVI for this new Endeavour to be a big success!

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