3 Reasons for Activision Investors to Worry

Activision Blizzard (NASDAQ: ATVI  ) is facing three major challenges this year.

First, it has to fend off an attack by Disney (NYSE: DIS  ) on its uber-profitable Skylanders franchise starting in August.
 
Next, Electronic Arts (NASDAQ: EA  ) is going head-to-head against Activision's Call of Duty franchise in the fall.
 
And third, casual and free-to-play games are finally succeeding in pulling loads of subscribers away from Activision's cash cow, World of Warcraft
 
In the video below, Fool contributor Demitrios Kalogeropoulos discusses how the company plans to meet these challenges to its biggest franchises. Activision should see profits dip as the company ramps up marketing and sales spending to support new game launches in this competitive environment, he says. But Activision is still in a strong position as the move to next-generation consoles begins. And that should serve the company well through what's sure to be a difficult year.

While Activision and Microsoft have been taking most of the headlines lately when it comes to console gaming, investors following the gaming sector would do well to also keep tabs on Electronic Arts. We can help. The Motley Fool's special report breaks down the risks and opportunities facing the company to help you decide if EA is right for your portfolio. Click here to get your copy now.


Read/Post Comments (2) | Recommend This Article (1)

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  • Report this Comment On May 17, 2013, at 9:19 PM, tbarbar90 wrote:

    One thing I know is that Blizzard has always released high quality games. Not necessarily the sole indicator of the stock price but can be an indicator of a well run company. WOW is an old game now. It will lose subscribers. They just have to make up for that with new offerings.

    EA, um, often has problems and was recently listed as one of the most hated companies (up there with bank of America and Comcast)

  • Report this Comment On May 18, 2013, at 8:32 AM, TMFSigma wrote:

    @tbarbar - I agree with you there. I think WoW surprised most people by holding such a big user base while free-to-play games took over. And I think EA actually made it to "the Worst" company in America. SimCity angered a *lot* of folks.

    Best,

    Demitrios

    (TMFSigma)

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