Activision Blizzard stock reached a 52-week record high this week, and one Wall Street analyst says that Blizzard‘s most-recent title, Overwatch, is the reason why. The analysis, reported by Dot Esports, details that the Activision Blizzard Stock stock reaching $61.58 yesterday marks a one year return of 65.4 percent. Separate analysis by Zacks Equity Research also praises Overwatch‘s breakout success as a likely cause for the high returns, adding that upcoming holiday releases could further the company’s success.
Oppenheimer Holdings analyst Andrew Uerkwitz is calling Overwatch a “generational game changer.”
“We are positive about Activision Blizzard’s enviable popularity in the video game publishing arena, which is primarily driven by its well-known franchises, that includes the likes of Call of Duty, StarCraft, and Warcraft,” says Zacks. “It currently has eight well-known franchises worth $1 billion.”
“It is worth mentioning the super success of its latest franchise, Overwatch, which has over 30 million players now following its release on May 24, 2016. Investors should note that the company is set to debut Destiny 2 and Call of Duty: WWII later this year over the holiday season. We believe these will be the two big revenue drivers for the company going ahead.”
Zacks goes on to note the buyout of King Digital Entertainment last year by Activision Blizzard for having “boosted Activision Blizzard’s presence in the lucrative mobile gaming arena.” King, creators of top mobile title Candy Crush, acquired data analytics company Omniata earlier this year—likely a move to further the developers inroads to mobile and Facebook gamers.
Still, Overwatch‘s success is likely the biggest reason for such high returns. Oppenheimer Holdings analyst Andrew Uerkwitz even went so far as to tell Dot Esports that the game is a “generational game changer.” He cites three reasons for the game’s success: its diverse design, a broad content marketing strategy, and esports.
“Its diverse cast of playable characters and cross-genre gameplay enable the game to reach a much wider audience of different skill level, taste, and personal background,” details Uerkwitz. “[Furthermore,] Overwatch is known for its transmedia storytelling across comics, animated shorts, fan arts, and social media interactions with game developers. The multichannel, multimedia content strategy opens the game to higher exposure, player engagement, and more diversified revenue streams.”
Uerkwitz’s highest praise, however, is aimed towards the game’s esports potential.
High stock returns such as those seen by ATVI will likely inspire further investing in gaming and esports, and in Activision Blizzard Stock.
“Overwatch has the potential to become a major esports phenomenon due to its innovative design, broad appeal, and Activision’s esports strategy,” he says. “Activision is organizing the world’s first professionally run, team-owned global esports league. We expect esports to bring sustainable long-term growth of Overwatch’s player base and revenues through deeper engagement and in-game content sales.”
Indeed, Activision Blizzard Stock growth this year is a great success story that coincides with the expansion and professionalization of the esports industry. High stock returns such as those seen by ATVI will likely inspire further investing in gaming and esports, both in private investment deals and through public stock markets.