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Photograph by Troy Harvey/Bloomberg
BlizzCon is as important in the world of videogames as the annual meeting at Warren Buffett’s
Berkshire Hathaway
is to investors.
People want to know what the Blizzard side of
Activision Blizzard
(ticker: ATVI), the company behind hugely popular franchises such as Overwatch, Diablo, and World of Warcraft, has lined up in the way of new products. It matters both in terms of what games will be available to play and because the slate is critical for the stock.
But this year, players had an early peek behind the curtain, thanks to a string of leaks dating back to June. So when Blizzard made major announcements regarding those games at the event, held Friday and Saturday in Anaheim, Calif., some on Wall Street were left wondering if there was anything else.
Indeed, prior to revealing a sequel for Overwatch, Blizzard Vice President Jeff Kaplan joked that many of the details were already online courtesy of an ESPN report. He later told the gaming publication Kotaku Australia that the leaks were demoralizing for those working on the game.
Activision Blizzard stock was down for the day after the event’s main presentation late afternoon Friday/ It lost another 1.3% to $55.09 on Monday, although things could have been worse.
During last year’s BlizzCon, enraged gamers sent the stock down nearly 7% after the company announced a mobile version of Diablo, rather than a full-fledged PC sequel. Jefferies analyst Alex Giaimo noted this year’s event avoided a similar blowup, and that “the gamer audience was pleased with Blizzard’s messaging.”
This time, the company offered a detailed cinematic trailer for Diablo 4, though it told fans the game isn’t coming out soon.
The convention also came as Blizzard faced pressure from players and even a bipartisan group of U.S. lawmakers for banning Ng Wai Chung, a professional Hearthstone player who made pro-Hong Kong comments in a post-tournament interview. A crowd of protesters outside BlizzCon chanted “Free Hong Kong” and “People over profit,” according to ESPN.
Blizzard barred Chung from professional competition for 12 months and stripped him of his prize money, though it later cut the suspension to six months. President J. Allen Brack apologized at the event, saying Blizzard’s response was rushed and that the company hadn’t lived up to its values. He drew criticism online for not mentioning Hong Kong or clarifying whether the suspension might be reduced even more.
Analysts had mostly positive reactions to the event. Giaimo called the conference a net positive for the company, though he said questions about release dates for Diablo 4 and Overwatch 2 may have hurt sentiment.
“While investors will likely push back on timing and specific monetization decisions, big picture is that ATVI just announced two new games within its top franchises,” Giaimo wrote.
J.P. Morgan analyst Alexia S. Quadrani noted initial receptions to game announcements were positive. Trailers for the games were trending on YouTube and “garnering very small percentage of dislikes,” she said.
“We are also encouraged by Call of Duty: Modern Warfare’s initial performance, earning more than $600m during its first weekend, the best performance of a CoD title in this console generation and higher than last year’s Black Ops 4 by roughly $100m,” she added.
Baird’s Colin Sebastian said the company has a robust pipeline of games in development, a factor that he said reinforced his upbeat long-term view of the stock, given Activision Blizzard’s “market leadership, depth of portfolio, and growth opportunities.”
Stifel’s Drew E. Crum wrote that “because there were several ‘leaks’ leading up to the event, we’d characterize these as generally in line with expectations, but nonetheless a robust game pipeline.”
The company is expected to report third-quarter earnings after the market closes on Thursday. Barron’s highlighted Activision Blizzard stock in August, citing the potential for it to gain from games such as World of Warcraft: Classic and Call of Duty: Modern Warfare. We also noted last month that the company could benefit from the next generation of gaming consoles, to be released in 2020.
Write to Connor Smith at connor.smith@barrons.com
