Activison Blizzard Inc. (ATVI) and Marvel Entertainment LLC announced the launch of their next Spider-Man game titled Spider-Man: Edge of Time.
The game has been developed by Beenox, a studio owned by Activision and is slated to release in the fall.
Spider Man: Edge of Time is the latest addition to the Spider-Man game series. The game features a unique “cause-and-effect” gameplay. As the name suggests, the feature helps players experience how the effects of shifting timelines impact Spider-Man.
Recently, Activision announced the release of NASCAR The Game 2011, which includes in-depth multiplayer modes that allow up to 16 players. In both online and offline races, players earn NASCAR experience points that help unlock rewards, such as decal packs or special car designs, as well as career sponsorships and special races throughout career mode.
We believe NASCAR 2011 and Spider Man: Edge of Time will boost Activision’s customer base, thereby driving top-line growth in 2011.
Activision is the largest digital publisher in the market today, but some of its growth has come at the expense of margins. Management recently changed its focus, intending to defocus low-margin and low-potential businesses. Management expects the high-margin digital business to remain strong going forward.
However, the company faces stiff competition from Electronic Arts Inc. (ERTS) and Take-Two Interactive Software Inc. (TTWO) at this point.
We have a Neutral recommendation on Activision over the long term (6-12 months). Currently, Activision has a Zacks #4 Rank, which implies a short-term Sell rating.
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