If the stock market is a game, Activision Blizzard (NASDAQ:ATVI) shareholders are winning. The stock is up 60% over the past 12 months (18% in just one day last week) compared to the broader market's 20% boost.

Its most recent quarterly report hit all the right bullish notes. The video game developer's sales and profit figures raced past management's expectations, profitability hit a new high, and the company projected surging growth ahead as it cashes in on existing gaming franchises while expanding into lucrative new properties and business models.

When there's that much optimism going around, it's useful to consider the bearish viewpoint. So here are a few ways Activision Blizzard might fail to meet investors' high expectations this year.

1. High-profile flop

The company has made great strides at diversifying its gaming business. Just a few years ago, almost all its profits came from just its three core franchises. Today, the publisher counts over a dozen high-profile brands. Some of its most popular games, like Destiny and Hearthstone, have only just recently been launched.

A scene from Activision's "Destiny" game.

Image source: Activision.

The video game industry is still a hit-driven business, though. Last quarter's blowout results were powered by the runaway success of Overwatch, which became Blizzard's fastest franchise to reach 25 million registered players, and Call of Duty, the brand that topped sales charts for the eighth straight year in 2016.

The business isn't as exposed to a high-profile flop as it was in 2014, when well over 80% of operating income was generated by the Call of Duty, World of Warcraft, and Skylanders brands. Yet a major release that fails to resonate with gamers still has the potential to knock Activision off its growth track.

2. Mobile misfires

When Activision bought the mobile game giant King Digital last year, its big hope was to find a way to better monetize its massive base of active users. So far, the plan is working. King rolled out advertising to most of its 400 million players, which helped push its revenue contribution higher. King's profitability has jumped closer to the company average, too. Operating income was 36% of sales last quarter, compared to 42% for the Activision studio and 41% for Blizzard.

Mobile gamers appear to be staying engaged through both the advertising rollout and new app launches. Yet "engaged" means something different for a mobile player than a fan of Activision's other franchises. King Digital gamers spent 34 minutes per day on average playing its games last quarter, while a typical user dedicated three hours per day playing Destiny after its launch. The King acquisition took Activision's user base from around 80 million to nearly 500 million, but the company needs to continually wow those casual players to keep them pitching in to operating results.

3. Spreading itself too thin

There are big risks around the company's expansion beyond its core video game competencies. In just the last year, it has made an expensive push into e-sports, doubled down on licensing content for movies and television shows, and targeted consumer products as a new core division.

Kids playing video games.

Image source: Getty Images.

CEO Bobby Kotick recently described these initiatives as "more ways to celebrate and connect to our communities." Diversity is a great goal, and it makes sense that the company would look for complementary ways to extract value from its deep catalog of intellectual property. Yet the temptation to morph from a video game specialist into an entertainment powerhouse must be balanced against the challenge of consistently innovating great gaming experiences.

It would be a disappointment if a few of these new business lines don't pan out, but the bigger worry is that Activision takes its focus off its interactive entertainment competencies and the quality of its gaming content declines as a result.