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Case Analysis Of Activision

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Introduction
Activision is an interactive entertainment company founded in 1979. This company is a leading worldwide developer, publisher and distributor or interactive entertainment for various consoles, handheld platforms, and PC. Technologically, Activision has done quite well in the past, integrating into PC from console, and by buying King Digital, a giant mobile interactive entertainment company (Activision, 2017). While these markets are great, much attention is being brought into more realistic gaming engines and also virtual reality. This poses a great challenge to the company which does not have assets in these rising markets. Its current performance in technology is quite renown owning tremendous titles such as World of Warcraft
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Having titles that can be expanded gives them sustainability and incredible revenues. In 2014 their net revenue was $4.4 billion, in 2017 it hit a record of $7.02 billion. Clearly this company is doing something right, with that amount of increased revenue in just 3 years. Their Costs of Goods sold has increased as well from $1.53 billion in 2014, to $2.5 billion in 2017 (MarketWatch, 2018). The company’s growth on their premiere titles alone has been destroying interactive entertainment records. In its last fiscal year, Activision Blizzard reported record revenue of $6.6 billion, up 42% from the year before. Over the past five years, its stock price has risen more than 400% (Lev-Ram, 2017). There has been tremendous growth in a three-year period, which is a huge representation of their …show more content…
But from the countless amount of titles they put out, only a small percentage have been successful. With high production costs of new game franchises this can take a toll on expenses making it a risky expenditure. Most of their revenue comes from their most popular franchises, which is only about four game franchises, exposing them to some risks. In the interactive entertainment genre, the competition is tremendous. Activision faces some of the mightiest competitors, competing with Microsoft, Sony, Epic Games, Nintendo, Ubisoft, Disney, Square Enix, Electronic Arts, and that’s just to name a few, who have already expanded into other platforms such as iPad, iPhone apps, Virtual Reality, etc., while Activision has yet to fully take the dive. In the interactive entertainment industry, the consumers are volatile. It just takes one title to turn a competitor’s title into an obsolete

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