On February 9th, Activision Blizzard (ATVI) announces their 2011 earnings. I think they will beat earnings based on record sales of Call of Duty, and new games on the horizon including Diablo III and potentially The Hunger Games.
Activision reported that COD3 was their most successful launch ever, selling over $1B in product in only 16 days following their November 8th launch. ATVI also introduced new features such as Elite over the past quarter, and over 1M paid subscribers at $50/year as of January 9th. That's just additional income for ATVI and shows you they are looking for ways to exploit their die-hard fan base who can't get enough of the new maps and features offered to Elite subscribers.
Also coming in 2012 is the much anticipated (since 2008) release of Diablo III to consoles, courtesy of ATVI. Diablo has a huge fan base that can't wait to get their hands on the cult-hit game. Everything points towards an announcement for a release date on February 9th when they report 2011 earnings.
The last point I want to mention is about a book I've read recently called The Hunger Games. The Hunger Games is set in a future post-apocalyptic world where citizens are forced to participate in an annual "game" which is basically a fight to the death to show their allegiance to the capital. It is a great book and a must read for any of you. Lions Gate (NYSE:LGF) is releasing a movie in mid-March 2012 which is the first of 3 films documenting the Lions Gate series. The series is sure to be a box-office hit just going by the sheer numbers.. in mid 2011 there were just under 10M books in circulation, by the end of 2011 there were nearly 24M books in circulation and the book trilogy was the top seller on Amazon and as you can see is still #1 on the Amazon book store with nearly 500 days in the top 100. While I can't find too much concrete evidence that ATVI will be releasing the video game series associated with The Hunger Games, a simple google search reveals a lot of "chatter" speculating that they will be the beneficiary of the video game series. This, needless to say, would be a huge win for them considering the cult-like following.
As I mentioned before, ATVI is announcing earnings on Feb 9th. The company is profitable, pays a small dividend, and trades at about 19x earnings, so it isn't overpriced considering future earning potential. Most analysts rate ATVI a "buy" giving it an average rating of 1.9 on a scale of 1-5, with 1 meaning "strong buy" and 5 meaning "sell". The median target price is $16, representing about a 30% upside to the stock.
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