Friday, the 11th of January saw another huge share price drop for Activision Blizzard. The 10% drop came after the gaming giant announced a split with Bungie, the creator of the “Destiny” game.
Destiny is a first-person shooter game. Now that the publishing rights were handed back by Activision Blizzard, Bungie will hold and develop the entire franchise. Blizzard Activision will not benefit in any way from the game in 2019.
With the split already being filed with the Securities and Exchange Commission (SEC), fans are already making assumptions. Destiny 2: Forsaken left very little for the fans to satisfied with. The overall game reviews have been negative and sales expectations were understandably, not met. Many investors are also concerned about the loss of revenue from the game.
Activision Blizzard’s stock suffered a lot by the end of 2018. Many people would argue that the growing competition in the rapidly-growing market is the main reason behind the drop. Even if we look at Fortnite’s amazing success from 2018, that is simply not the case for Activision’s drops.
2018 started off with Activision losing Spencer Neumann to Netflix. The chief financial officer was reportedly fired for violating his legal obligations. Amrita Ahuja, the Blizzard CFO left in roughly the same time to join the payment company Square.
Many employees have reported that Blizzard is hard at work to find creative ways to cut down costs in ways that will not attract any negative attention. These factors however, are still not the main reason for the price drop.
The biggest problem the company faced last year, was the honest and downright brutal disappointment of their fanbase. The very hyped and long-awaited expansion for the World of Warcraft franchise titled “Battle for Azeroth”, was a complete disaster. A huge amount of funds was invested and the result was quite simply terrible.
Activision Blizzard are so out of touch it’s completely unreal
Despite having one of most loyal and dedicated fanbases in the world, the game saw a record number of players cancelling their subscriptions after just 2 weeks. When the expansion was up for more than a month, more than 60% of the players who have purchased it, had already cancelled their subscription.
Additionally, at Blizzcon the company suffered an absolute PR nightmare. The company announced a mobile MMORPG for IOS and Android. Following the announcement, the game probably received the most negative reception in gaming history. Since the vast majority of the company’s playerbase are die-hard PC gamers/users, a mobile game is the last thing they could possibly want.
This showed how out of touch the company was with its fanbase and the announcement turned into a nightmare. The reception of the game was so bad that people in the audience were legitimately asking the developers if this announcement is “an out-of-season April Fool’s joke”.
The online gaming rapidly growing. In fact, the market is expected to reach a value of over $25 billion by 2020. Epic Games is already expected to earn around $3 billion in revenue 2018 just from in-game purchases in Fortnite.
If Activision Blizzard do not step up their game, pun intended, they will rapidly lose their fanbase and be pushed out of the market by the new boys on the block.
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