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What Has Affected Activision Blizzard Stock Recently?

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Apr. 12 2019, Published 8:14 a.m. ET

Activision Blizzard stock was trading at $84 in October 2018

Activision Blizzard (ATVI) stock was trading at ~$84 in October 2018. The stock has since lost 43% in market value. Gaming companies such as ATVI, Electronic Arts (EA), and Take-Two Interactive (TTWO) have been affected by the overwhelming success of Fortnite, a game that has taken the industry by storm.

Fortnite was the most successful game released last year. It generated $2.4 billion in sales.

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Though Activision Blizzard has an enviable portfolio of games across genres such as Call of DutyOverwatch, World of Warcraft, and Candy Crush, the company is still expecting its sales and earnings to fall in the double digits in 2019.

For the first time in several years, Activision Blizzard will be experiencing negative sales growth—and in a segment that’s still expanding at a robust pace.

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A fall in monthly active users

In the chart above, we can see that Activision Blizzard’s number of MAUs (monthly active user) has been declining steadily over the last few quarters. Its average number of MAUs in 2016 was 491 million, and this number fell to 402 million in 2017 and 357 million in 2018. The decline was primarily driven by the performance of King Digital, which saw its number of MAUs fall from 463 million to 268 million over the same period.

Now that the stock has almost halved over the last six months, is the worst over for Activision Blizzard? Will its foray into esports help it offset falls in other segments?

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