The successful launches of the PlayStation 4 and Xbox One have brought renewed hope for the console gaming industry and the software developers who create its content . The latter years of the last console generation returned worrying results for the industry, with deteriorating hardware numbers and declining sales for key franchises like Call of Duty kicking off fears that the console gaming industry was on its death march. If those fears are still present, they certainly aren't affecting Activision Blizzard (NASDAQ: ATVI). The company's valuation hit a record high after the release of its most recent quarterly earnings with share price up 14% at one point following the news.

Activision is the largest games publisher in the US and looks to further its position as an industry leader by introducing prime new properties. Much of the company's success in the coming years is dependent on whether or not it can make its upcoming megaproject Destiny the biggest thing in gaming. Is Activision on a path to continued success or is this latest valuation explosion a symptom of unwarranted hype?

Fun for the whole family
Whether or not Destiny winds up delivering on its many promises, there's no denying that Activision has performed for investors in this last quarter. Earnings per share climbed to an all time high of 79 cents on $2.27 billion in revenue, beating analyst projections of 73 cents per share on revenue of $2.2 billion. This figure is down from $2.6 billion in the corresponding 2012 quarter, but still mightily impressive. The better than expected performance is the result of strong sales across multiple genres and platforms.

While the "Call of Duty" series has shown signs of franchise fatigue, Call of Duty: Ghosts was still the second-best selling game of 2013, trailing only Grand Theft Auto 5 from Take-Two Interactive (NASDAQ: TTWO). This scenario is made even better for Activision by the fact that Call of Duty: Black Ops 2, which was released in 2012, was the ninth best selling game in 2013. Activision also drew strong revenue from its online role playing game World of Warcraft and iterations of its toy/video game hybrid series, "Skylanders," which delivered the best sales for a family targeted game in Q4.

Activision's future is dependent on Destiny
CEO Bobby Kotick knows that his company's future is dependent upon an ability to launch the next big thing. Kotick has stated that Activision's Destiny will become the best selling new IP in the history of gaming. The game stands as the company's all-time biggest investment in new IP and is reported to be one of the most costly to develop in the history of the industry. Conceptual work on the game began in 2004, when developer Bungie was still partnered with Microsoft and creating exclusive content for the Xbox platform.

Activision must find ways to make up for lost momentum that World of Warcraft and Call of Duty will suffer in coming years. Destiny is central to the company's strategy. Launching on PlayStation 4, PlayStation 3, Xbox One, Xbox 360, and PC will enable the game to reach a massive audience, however it may not be as large as Activision hopes. 2013 hardware and software sales show that the new consoles are experiencing rapid adoption and drying up business on their predecessors quicker than expected. This means that the game's performance on the new platforms becomes increasingly important. Mainstream audiences on PlayStation 3 and Xbox 360 must be converted to the new platforms in order for Activision to reach its goals.

Multiplayer game
Activision's Destiny will undoubtedly be the best selling new IP of the year. EA's Titanfall may have a chance at being the most influential title released in 2014, but the fact that it will only debut on Xbox platforms and PC substantially reduces its sales potential. Still, Titanfall is a massive property for EA and Microsoft and one that is frequently mentioned as a game that could tip the console war tides in favor of the Xbox One.

While Activision and EA's 2014 plans are largely known commodities, Take-Two's slate for the year is something of a mystery. Rampant rumors suggest that Grand Theft Auto 5 is headed to PlayStation 4, Xbox One, and PC in 2014. Stoking these flames, President Karl Slatoff has stated that the company's key software will land wherever the right audience is. A look at hardware and software numbers from the tail end of 2013 make it clear that this is on next-gen consoles. The notoriously secretive Take-Two could also release a sequel to Red Dead Redemption this year.

Let Destiny be your guide
When it comes to possessing a large stable of valuable IPs, no American gaming company can claim a significant advantage over Activision. The company's explosive growth on the heels of its most recent quarterly earnings speaks to solid performance from existing franchises and the apparent strength of its upcoming megaproperty, Destiny. The game's performance, hit or miss, will have a massive impact on Activision's future outlook.