The cyclicity of gaming

Posted by David Konow

This fall and winter will be big for gaming, with a number of major titles hitting store shelves.  



There's Call of Duty: Black Ops 2, which is considered the Avatar of games, coming out on November 13, and there's speculation it could be the biggest game of all time. This is certainly good news, because the gaming industry has endured many ups and downs over the years. Of course the recession hasn't helped either, so if it can regain a foothold with Call of Duty, that's great.

The cyclicity of gaming

Recently, Businessweek reported that Activision Blizzard "posted quarterly results that beat analysts' estimates," and Variety reports the company "post[ed] $1.1 billion in revenue."

Thus far, the company has recorded great success with Skylanders and Diablo, and indeed managed to weather the ups and downs of the current market which is characterized by waning disc sales and an increase in online content. 


Nevertheless, Activision did lose some 1.1 million World of Warcraft (WoW) subscribers, but Diablo III and Call of Duty did very well, perhaps helping to offset the above-mentioned losses. As the International Business Times notes,  subscribing to Warcraft, where you pay $15 a month to play, generates 30% of Activision's profits. But again, Diablo III, which has over 10 million players, and Call of Duty, picked up the slack.
 
As Cliff Edwards reports, second quarter sales for Activision went up 51% to $1.05 billion, although he also reports that "total revenue fell 6.2 percent to $1.08 billion."

Still, they've also got the next World of Warcraft expansion pack (Mists of Pandaria) ready for September 25, which puts sales projections at an estimated $4.59 billion. Edwards also tells us that Activision has exceeded estimates in almost every quarter except one for two years.
 
So again, the last quarter of this year should be a blockbuster for gaming with this much action lined up. As we've always say, the gaming business is very up and down, but right now predictions are pretty strong for the future, especially with Call of Duty in November - and of course Mists of Pandaria shouldn't be too shabby either.