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Varchild2008 (85.01)

Ultra Nerd VARCHILD's Analysis of ATVI's Big Loss in China



October 12, 2009 – Comments (2) | RELATED TICKERS: ATVI , SNDA.DL , SOHU

What happens when you have tens of millions of Video Gamers unable to play World of Warcraft for the forseeable future?

Do they...

1)  Sit and sulk for awhile and eventually dump playing video games in place of other things like Hopscotch, Fooseball, and paper triangle football???


2)  Eventually come face to face with the fact that they are powerless to change their COMMUNIST, DICTATORSHIP's regulatory actions and find some other video game to occupy their allotted minutes per day with?

If you guessed #2 then you know why VARCHILD2008  *SCREAMED* for Video Game Investors to Double Down on CHINA.

I'll do it again.....

DOUBLE DOWN ON CHINA!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!     Buy  (GAME) and buy (SNDA)  and buy (CYOU) and buy (SOHU).....   Pick 2 out of those four that you like/prefer and throw your cash at it.

Don't have any cash?   Sell off some of your ATVI shares starting tomorrow if you didn't already today and put THAT CASH into 2 out of the 4 video game stocks.

*Woaw*  Why should I do this?  What's going on??  "says clueless investor to Varchild"

Didn't you hear the news???    As of right now in possible retaliation against Pres. Obama's Tire Tarrifs against Chinese Tires,  the Chinese Government has completely shutdown all online video games from Foreign Video Game Publisher Joint Ventures.  That's about 46 video games totally dead in the water in CHINA right now.

The smart money would panic and pull some if not all of their money out of ATVI in search for a better investment.

Varchild2008 is not asking for people to PANIC and pull out of ATVI like stupidly..  ATVI remains a good investment for a large amount of reasons still.....What they lose in CHINA they can try and gain a little back elsewhere.  Or open WOW into markets/countries where it is currently inaccessible.

There is still a GROWTH story for WOW without CHINA.... It is just not a very AS-Good one.  Not at all...

So....Instead of being a Panic Attack away from a Heart Attack...hearing that there is now WOW in CHINA.... No BLIZZARD Revenue from CHINA for the forseeable, indefinite future...

INVEST in CHINESE online VIDEO GAME company's that will begin to see dividends by the boat load from video gamers who start to believe they will never ever get to play WOW ever again and be forced to find "something else."

When they go out and try to "find something else" who knows what they will turn to.  I haven't a clue.  I don't know.... I can't say (GAME) is a better buy versus (CYOU).... I can't.... That's why you DOUBLE DOWN on the 2 major available video game company's in CHINA.... One if not Both should come out a big winner.

So... Stop Whining about ATVI being dead in CHINA.. And Start diversifying your Portfolio to protect yourself from crap like this.  It's why I have 2 Chinese Videogame Stocks in my portfolio more than a week ago.. I knew something bad could happen in China for ATVI since China has plenty of reason to be UPSET at America right now.

2 Comments – Post Your Own

#1) On October 13, 2009 at 11:45 AM, jamespeer (26.93) wrote:

Although there are a large number of WOW addicts in China, I don't think that's a good enough reason to pull any money out of a cash cow like ATVI (just take a moment to look at their financials).  Please bear in mind that WOW is only one of the many revenue streams under the Activision tree (Call of Duty, Guitar Hero, DJ Hero, Diablo, Starcraft etc.), and that even without China, the number of WOW players is still likely to double by 2012 (emerging market countries like Malaysia, Indonesia, Vietnam, Taiwan, Thailand etc all have a rapidly growing WOW communities).

That said, I have to wholeheartedly agree with the Chinese online gaming picks you have mentioned.  I myself bought into the ChangYou IPO and have recently been loading up on GAME as I see the same thing happening to them.

To summarise, if you have to free up cash to buy shares in any of the quality companies mentioned in this blog (GAME is my pick of the bunch at this moment), the last thing you want to do is be selling off ATVI stock in the $12 region, you will only live to regret this...   

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#2) On October 13, 2009 at 7:25 PM, Varchild2008 (85.01) wrote:

I'm not saying to pull money out of ATVI..

All I am saying is that most investors are fully invested .... and can't spare a dime to put into a Chinese Equity....

Therefore... It is no big deal to snitchel ATVI a little bit and use the money for whatever Chinese stock (GA) Giant Interactive is another one..... that you think benefits if WOW gets put out of the picture in China....

Someone is going to gain market share when WOW goes DARK.... IF it goes dark.... Certainly nothing is definite right now....

But..crap... it's tough for me to explain sometimes....

Sometimes diversifying your portfolio within the same sector makes sense if you have a strategic mindset to justify it.

My mindset is that GAME and CYOU could potentially gain market share if the Chinese Confederacy sees fit to make it happen.

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