Finally, a realistic longterm view of ATVI
Expect some short term pain this year and next.... only to discover long term growth happening more on the BLIZZARD side of business and less so on the ATVI side.
Blizzard could be set to start outpacing revenue growth year over year versus ATVI's Guitar Hero and other popular franchises. I'm not all that worried if ATVI starts to contract... Cause I see BLIZZARD set to accelerate their earnings potential... And I believe Blizzard can outpace any contraction ATVI may go through from the current High Unemployment situation in America and Global.
Before I continue... read the following from www.gamespot.com if you haven't seen this yet:
Whether or not WOW changes their pricing model from subscription based to transaction based is negligible to my understanding of the MMORPG business (which is nill). But, I will say that I would be a 100% immediate WOW video gamer if they did!
The only thing stopping me from playing WOW is that you have to PAY in order to PLAY so when you stop PAYING you are essentially screwed out of a video game you spent $100+ in already.
Transaction model means I can play regardless of how much I pay or not pay at all.
Since this company has mastered the art of the "MMOG" with World of Warcraft, it's an easy prediction to expect they will make more MMOGs in the future versus just throwing out expansion packs of WOW indefinitely. I am super happy that BLIZZARD is looking to do something outside of the RPG space.
So, that last paragraph at GAMESPOT (http://www.gamespot.com/news/6213042.html?tag=latestheadlines;title;2) is of no surprise for me:
"Chilton declined to comment on the subscription model for Blizzard Entertainment's upcoming top-secret MMOG. However, the WOW developer-publisher has said that the said the game will be an entirely new IP unique enough as to not compete with World of Warcraft."
Now is there room for 2 MMOGs running at once at Blizzard, and can this mean TWICE the revenue? YES and NO.... There's probably no realistic way to just assume their next MMOG will be as successful as WOW or any MMOG made by any video game company ever will....
But, you have to love that the MMOG will not be another RPG.... There's a chance they may try to go after Casual Video Gamers who don't have the time to invest in a game like World of Warcraft but enjoy the Social exposure and attention you get out of the MMOG space.
But... Looking at the possibility of transaction based pricing combined with a brand new IP MMOG for Blizzard for CASUAL video gamers is extremely interesting. It smacks of (SOHU) style business model.
So, I don't mind the current economic turmoil and I don't mind it at all if Starcraft 2 and Diablo III miss the extremely high expectations for sales that ATVI investors have when they push the stock to $13.00 a share.... I don't mind any of that when I can see that BLIZZARD is going to expand it's library of MMOGs.
I am speculating...speculating....speculating like absolutely crazy nutz to suggest / hope / prey BLIZZARD tries it's hand at competing with SOHU for the Casual Video Gamer Market!!
But, come on.... It just makes sense.... What else would they do that would generate millions of gamers in first few weeks of release? There are a growing size of Casual Gamers in the world right now and ATVI / BLIZZARD's market share of this is rather small compared to how much it could grow in the future.
ChangYou is the only other major player in the MMOG space in China.... Blizzard could really hit on all cylinders having multiple MMOGs running on NetEase's servers in China.... So, fears of losing some WOW subscribers due to downtime from switching from The9 Limited to Netease is misplaced and misguided. In other words "YAWN."
Investors of ATVI should sit on the sidelines awhile longer and let the Economic Turmoil story play out for a while longer.... Then.. if ATVI hits a $10 handle... I'd start aggressively buying more shares doing WIDE BUYS as it goes lower.
In reality... I'm super bullish on ATVI between $10.XX and however low Sellers and Shorters can push the stock down.
I think it is time to stop talking about "Starcraft 2" and "Diablo 3" cause that's the wrong way of looking at ATVI. I am telling you... www.gamespot.com is telling you of the best way to look at ATVI's future.
Now is the time to focus all your attention on (CYOU) and research that business to get a much better picture of where BLIZZARD is headed 5 to 10 years down.
ATVI didn't agree to merge with BLIZZARD just because of World of Warcraft.... They merged because of the BUSINESS of MMOGs in general. A revenue space that ATVI hasn't tapped at all could soon dwarf and dominate ATVI's overall balance sheet as more MMOGs go public.