Video game maker Activision Blizzard (NASDAQ:ATVI) has had a great year by just about any measure. Its player base significantly increased over 2019 thanks to Call of Duty's recent releases, putting the company on pace to report record bookings and profits for the full year. 

The potential availability of a COVID-19 vaccine (or vaccines) and difficult year-over-year comparisons will likely make 2021 a more challenging time to maintain the recent momentum. But Activision Blizzard could have a few surprises up its sleeve and do just that. 

Social gaming is driving growth

For 2020, Activision Blizzard's latest guidance calls for total bookings to reach $8.1 billion, while adjusted earnings per share is expected to come in at $3.08. That's a year-over-year increase of 27% and 33%, respectively, for bookings and adjusted EPS.

Graphic art of characters from Overwatch 2.

Overwatch 2 was announced at BlizzCon 2019. Image source: Activision Blizzard.

Those are impressive numbers, but Activision Blizzard wasn't growing anywhere near that fast before the pandemic. Momentum was already brewing at the beginning of the year following last year's release of World of Warcraft Classic and Call of Duty: Mobile. But the stay-at-home dynamics played a large role in driving higher player engagement and growth of digital net bookings this year, which may not repeat in 2021. 

It's unrealistic to expect the Activision Publishing segment, for example, to continue reporting 270% year-over-year increases in revenue, as it did in the third quarter. But it's also unrealistic to expect that many of these new players who have had a blast playing with friends in Call of Duty: Warzone will permanently stop playing once the pandemic has passed.

Gaming is a growing industry that has become increasingly more social with the rise of live game streaming and the popularity of multi-player gaming. The pandemic only gave us a glimpse of where the industry is headed over the next decade.

Still, Activision Blizzard needs to keep innovating to drive growth through 2021. Here's what's in store.

New releases are pending

The release of Call of Duty: Warzone earlier this year shows that there's nothing that drives growth better than releasing a new experience for players. Call of Duty gets a new release every year, and Blizzard releases a new World of Warcraft expansion every few years. These two franchises will have to continue performing well for Activision to thrive.

World of Warcraft: Shadowlands releases on Nov. 23. Blizzard has the largest team ever working on this new expansion, which means there should be more content releasing in the near term to keep players engaged and maintaining their Battle.net subscriptions to play the game. So far, presales for Shadowlands have been the highest for any release in the franchise. 

What's more, Call of Duty Black Ops Cold War just released into the largest community of players in the history of the franchise. To capitalize on that, Activision shifted its marketing strategy by showing a reveal trailer for the new version of the series in Call of Duty: Warzone. By integrating content across Warzone and Black Ops Cold War, Activision believes it can keep the momentum going. 

These franchises, along with Candy Crush, comprised 67% of Activision Blizzard's revenue in 2019. But other franchises are waiting in the wings.

Blizzard officially unveiled Overwatch 2 at BlizzCon in 2019 but hasn't announced an official release date yet. However, an official release date may be coming soon, since in the third-quarter earnings report the company revealed franchise-level data about monthly active users that it usually doesn't disclose.

Activision Blizzard recently disclosed that Overwatch had 10 million monthly active users. The game has sold 50 million copies since its release in 2016, so there are millions of players who have stopped playing who would likely purchase the sequel, which will bring new game modes and other features. 

Diablo 4 is also under development. In 2012, Diablo 3 sold 3.5 million copies within the first 24 hours after launch, which was a record for a PC game at the time. There's going to be a lot of pent-up demand, eight long years in the making, when Diablo 4 finally launches. 

Expectations heading into 2021

Currently, the consensus analyst estimate has Activision Blizzard growing revenue and adjusted EPS only slightly over 2020. However, these estimates may not be factoring in any new releases from Blizzard next year and may only be including the expected growth from current titles.

It will be more difficult for Activision Blizzard to report meaningful growth over 2020 without new releases from Blizzard. The Activision segment registered a sequential decline of 11% in monthly active users last quarter, which is a sign that all the players who want to play Call of Duty right now are doing so.

A lack of growth doesn't mean investors should sell their shares, since the company is at the beginning of a long-term plan to apply the Call of Duty playbook to other franchises. Activision Blizzard has substantial opportunities to drive returns for shareholders in a growing video game industry, so investors should look at 2021 as a steppingstone to the next phase of the company's growth strategy.