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Analyst: Black Ops 2 sales a 'cause for concern,' downgrades Activision
Sales of Call of Duty: Black Ops 2 are on a trend to be down 15 percent from last year's launch of Modern Warfare 3, financial analyst Arvind Bhatia of Sterne Agee posits. Modern Warfare 3 sales were down 5 percent from the previous year's Black Ops, and if this scenario plays out again Bhatia calls it "a cause for concern" for Activision-Blizzard.Call of Duty as a franchise is responsible for up to 45 percent of Activision's earnings before interest and taxes, Bhatia says, justifying the concern clause. Average reviews of Black Ops 2 were lower than Modern Warfare 3's, and Black Ops 2 launched a week after Halo 4 but a week before Black Friday, meaning some customers may have waited to buy it, Bhatia says.Sterne Agee downgraded Activision's rating from "buy" to "neutral" and reduced 2013 estimates from $4.74 billion to $4.3 billion.All this is in spite of the fact that Black Ops 2 pulled in $500 million at retail on its first day, breaking records and surpassing Modern Warfare 3's $400 million, and is the UK's fourth largest launch ever.
Analyst: GTA V will launch in Q1 2013, sell 14 million copies
Sterne Agee analyst Arvind Bhatia is predicting big numbers for Grand Theft Auto V something fierce. Bhatia projects Grand Theft Auto V will debut during the first three months of 2013 and will pull in $700 million in revenue for Take-Two Interactive with 14 million copies sold over its launch window – though Bhatia didn't say just how long he considers this launch window to be.This $700 million figure is close to the $775 million earned by Modern Warfare 3 in its first five days of launch back in November, which is an entertainment record that has yet to be bested. Rockstar's previous effort, Grand Theft Auto IV, has shipped over 22 million copies worldwide.
Blizzard's Titan a 'casual' MMO
In case you were worried about a lack of new and accessible MMOs coming down the pike over the next couple of years, the king of casual is riding to the rescue. At least, that's what an analyst at Sterne Agee hinted at on Gamasutra recently. Arvind Bhatia is quoted on the game industry website as saying that Blizzard's product pipeline includes "expansion packs for StarCraft and World of Warcraft, a new Diablo game, [and] a new casual MMO." That casual MMO is of course Titan, the secretive WoW followup that has reportedly gobbled up Blizzard's most experienced designers. While no one outside of Blizzard has any inkling as to Titan's setting, mechanics, or target audience, Bhatia's prediction makes a certain amount of sense given the realities of the MMO marketplace and the costs inherent in developing and marketing AAA titles. Head to Gamasutra for the full report.
EA: 40% of game sales digital, NPD becoming less relevant
Digital sales have been an increasing boon for EA, a source of great profit and growth for the publishing giant, and the company now estimates 40% of games sold are bought through digital channels. Retail is becoming less of an important sector and the publisher feels NPD rankings are decreasing in relevance. Tomorrow, the latest NPD figures for the month of February will be revealed. "Overall, we think the digital growth aspect of the EA story is likely to get even stronger and to impress investors in the coming years," said Arvind Bhatia, Sterne Agee investment firm analyst, during a recent management meeting (via IndustryGamers). Globally, EA still recognizes the importance of retail product, but locally the company is looking to expand its mobile and downloadable offerings, leaning on its new EA Partners divisions to help expand its digital business.
Gamestop: Digital distribution not a threat for another five years
According to Gamestop's Sterne Agee analyst, Arvind Bhatia, retailers have nothing to fear from digital distribution -- not for the next five years, anyhow. Speaking to Industrygamers, Bhatia disclosed that Gamestop management has been conducting thorough studies on the capabilities of digital downloads and its potential adoption for several years now and that the findings are still in favor of brick-and-mortar establishments. Bhatia predicts that a market for downloadable titles won't put serious pressure on retailers until 2014, which he proclaims will be a time when "25% of the population" will have easy access to download technology and when price and storage capacity won't be such a concern. Although Gamestop's study might sound like it's trying to combat digital distribution, Bhatia states it's not about competition but more on adaptation and learning how to profit from the changing distribution channels. We can already see retailers taking a slice, stocking network prepaid cards in stores and offering DLC and full game codes stuffed inside retail boxes. If this is how digital distribution is already affecting retailers, how much moreso in 2014?
WoW generates half of Acti-Blizz earnings
The folks over at CVG picked up an interesting note on our Activision-Blizzard overlords' 2008 fiscals. According to Arvind Bhatia, World of Warcraft probably generated 30 cents out of each 60 cents per share of earnings. Put another way, that's about $400 million for shares at the end of the fiscal year ending this past December. Now, this is kind of the best guess of Mr. Bhatia, who works under the firm Sterne Agee. (And they certainly have a reputation that says we could probably believe them.) But even without Sterne Agee's reputation, a little back-of-the-envelope math shows that his analysis probably bears fruit. We already know that WoW has 11.5 million subscribers. At $15 dollars a pop per month, you're already looking at $172 million each month. But we know that a lot of folks have discount plans, and the charge isn't the same across the globe. I can easily believe a $400 million yearly earning from subscriptions, and am actually surprised it's not higher. Of course, Bhatia has recently lowered some of his other estimates for ATVI, and warns that the consensus estimates predicting $5.2 billion in revenue are probably too high. Nonetheless, at the end of the day, this does say that World of Warcraft is doing just fine. We can feel free to threaten to quit over the latest nerf, the lights're going to stay on while we're out the door.
