In games, you win some, and you lose some. For Activision Blizzard (NASDAQ:ATVI), the past few months have been dominated by the latter, and the pain just kept coming with its quarterly report Wednesday. It missed on revenue, the guidance was weak, and to top it all off, it's cutting head count. The market response -- a modest gain in the share price -- has to be viewed in the context that it came off a 52-week low.

In this segment from MarketFoolery, Motley Fool Asset Management's Bill Barker and host Chris Hill focus on the video game powerhouse, which, despite everything, does own some monster franchises. Is the worst over? Can it overcome the challenges of rival producers and creative flight? What's the strategy from here? And for investors, the key question: With the stock price essentially cut in half over the past four months, is it a good bargain now, or a falling knife?

A full transcript follows the video.

This video was recorded on Feb. 13, 2019.

Chris Hill: Let's move on to gaming. Shares of Activision Blizzard up 5% this morning. That, however, is the opposite story than what we saw with TripAdvisor. This bump this morning is coming off of a 52-week low. Fourth-quarter revenue for Activision Blizzard was lower than expected. Their guidance for the first half of 2019 was pretty weak. And on top of all that, they're cutting 8% of their global staff.

Bill Barker: Yeah, exactly. It was hitting a multiyear low going into this report, and things are not worse than the worst expectations, in terms of the guidance. I know there was a Deutsche Bank call that went out a couple of weeks ago, a fairly rare sell recommendation by a Wall Street research operation. That basically played out and was closed today, turned around. The recommendation now is that the short-term sell call was closed, the thesis having played out over a mere two or three weeks since the call was made. And the stock did go down from $47 to $40 over that time. It's back up to $42 today. The thesis there was that expectations were going to be cut, guidance was going to be cut for 2019 over where consensus was, and the revenue guidance is about a billion shy of where consensus was. So, it was possible, through research, to be on top of the fact that that might play out that way. Maybe we've hit a bottom here. The stock is about where it was three or four years ago.

Hill: You look at Activision Blizzard, which for a good stretch of time, a very high operator. They've got some good franchises in their portfolio. But, as we say all the time, both about the movie business and about the video game business, this is a hits-driven business. This is one of those things that doesn't really show up on the balance sheet, but you look at some of the media coverage specific to Activision Blizzard, and they've got a creative drain problem on their hands, in addition to everything else going on. They've got creative people at their company who are leaving Activision Blizzard and either going to competitors or just going out and starting up their own business. I think that, just on the face of it, makes you have to be a little bit bearish about their ability to create more hits. That's probably overstating a little bit, but it certainly doesn't make it easier to create more hits.

Barker: Right. In terms of what the focus is going to be, apparently it's going to be on bolstering and supporting the current monster franchises that they have --

Hill: Call of Duty.

Barker: Call of Duty, World of Warcraft, and many others that somebody more versed in video games than I am --

Hill: And, bizarrely, Candy Crush.

Barker: [laughs] You know, some of the things that the developers are working on, in their disclosure, they're cutting 8% of the workforce, said that that wasn't going to be in the developer area. But they've got stuff, Overwatch and Hearthstone and various other combinations of words which don't mean anything but sound cool.

Hill: You're not a Hearthstone player? There are a bunch of people at this company big into Hearthstone.

Barker: I'm just saying the name doesn't convey anything.

Hill: Well, I mean, the "stone" part probably does.

Barker: OK, what's the plot of Hearthstone, since you seem to know so much about it?

Hill: I don't know --

Barker: Don't point to Dan for help!

Hill: [laughs] Of course I'm going to point to our man by the glass, Dan Boyd, because not only does he know more about any great number of things than I do, he definitely knows more about Hearthstone than I do. Dan?

Barker: I'm not criticizing the game. I'm just mentioning that the title doesn't tell you very much.

Dan Boyd: Well, the title notwithstanding, it's an electronic version of a collectible card game. Are you guys familiar with Magic the Gathering or something like that?

Hill: Sure.

Boyd: So, instead of actual physical cards, you're collecting digital cards, and you're playing basically wizard poker with them against other people via the internet.

Hill: Wizard Poker is a pretty strong name. But Hearthstone has to be catchier.

Boyd: The core mechanic of the game is, you buy packs of random cards and you open them and hope for good ones. You buy them five at a time.

Hill: Can I just say, I know there are a lot of other podcasts out there, and therefore there are a lot of other podcast producers out there, I put Dan Boyd up against any producer of any podcast in terms of adding value. Oh, sure, there are a lot of producers who'll push the buttons and make the people on this side of the glass sound good. But I've yet to listen to a podcast and hear a producer really weighing in with tangible, meaningful contributions. Thank you, Dan!

Barker: That's because Dan's got his own podcast.

Hill: He does have his own podcast.

Barker: He's got those mad skills that are developed by actually doing this better than, I don't know, you or I do it.

Hill: Yeah. If this were baseball, we would refer to Dan as a five-tool player.

Barker: Yeah.

Hill: Did you have more on Activision Blizzard, the stock itself? Or should we just move on from here?

Barker: I don't know. What would you like to know? I don't have anything to direct people with, except to say it's more interesting to look at now that it's been cut in half in the last three, four months. This was an $80-some stock before, it's now a $40-some stock. There are a lot of other growth companies that have come down like that. A lot of them have bounced back better this year because once things went badly in October, November, December, the selling fed itself as people sold to realize tax losses before the end of the year, and a lot of other things that are in that category bounced back starting in January more so than Activision Blizzard has. It might be more interesting to somebody that's been waiting for an opportunity.