My bull case for buying ATVI at 1.3 Billion Shares outstanding. ATVI would need $1.30 EPS Annual to trade at a PE of 10. Here is how we that easily. World of WarCraft: 2.1 Billion In Revenue From Sub_script_ions. _base_d on 12 Million Subscribers (This Number Will only Grow as evidenced by 500k people leaving warhammer recently. Net on that 2.1 Should be: A little Over 1 Billion with taxes,cost,maintenance,royalties. 76 Cents a Year in EPS. Just For Conservaties sake lets assume WOW no longer grows and there is more cost involved and make that 76 cents 64 Cents Per share. With A share price of 9.95 ATVI would be trading at a P/E of 15 _base_d only on revenue from WOW that is conservative. Call of Duty: The king of Online FPS shooters. World at War is Outselling Modern Warfare. CODW: will Sell Have sold a Combined 6 Million Copies between XBOX 360 and PS3. For conservative sake lets put this at 5 Million. I will now input a Profit of 20.00 per game sold to compensate for taxes,development,Advertisement ETC. COD W = 100 Million on a Conservative PS3 & XBOX 360 Sales alone. Not counting DS,Wii. Once again I repeat COD is outselling World at War even though it was not as popular and Modern Warfare is preferred. Guitar Hero: The Activision Bashers Favorite Weapon.I Must say sales were disappointing and the share price from 14/15- 8/9 baked this in but let us examine Guitar Hero Sales For World Tour and Forecast what Future Conservative Sales should be at.There is a good nugget of info in this mess. GH World Tour is outselling GH3 in one platform. The Nintendo Wii has sold 2.4 Mill units to GH 3's 2.2 in the same time _frame_. Here have a look.
http://vgchartz.com/swlaunch.php?reg1=Al... Pretty Inserting Nugget.OK. So let us assume GH Undersells GH3 on all the other platforms by 50%. Guitar Hero Sell 3.5 Million World Tour Games. Keep in mind the band kit is 100.00 more than Previous bundle. Conservative 3.5 Million Total Units at an average price of 60.00 profit per unit To build in for Band kits and tax,cost etc.Very Conservative model give us 210 Million (Not to Shabby for a proven Franchise with _meta_llica on its way which is Highly anticipated. Quantum of Solace was actually a surprise over estimated sales.Ok Once again a conservative 1 Million Units Sold but it is more than that.
http://vgchartz.com/swlaunch.php?reg1=Al... 1 Million X 20.00 profit per game 20 Million Toward Earnings Diablo 3 & Starcraft 2.Let us for the sake of being conservative assume only one of these games comes out in 2009. Let us assume it is only half as popular as WOW. (Which anyone playing WOW will tell you is the most anticipated games in Years, and has not been out in 10 Years) Let us Say SC2 or Diablo whichever comes out and sells 4 Million Copies which is half of WOW. 4 Million x 20.00 in Profit Per unit = 80 Million Prototype: Expect this to be an excellent seller.Generating buzz fairly well. Let's assume this only sells a measly 2 Million Units. 40 Million in Revenue KungFu Panda: UM.People Missed this one. Not selling well until BAM. Christmas Look at Week 29.Movie comes out XBOX 360 Sales Shoot up from 200K to 2 Million.
http://vgchartz.com/swlaunch.php?reg1=Al... Once again a conservative 2 Million Overall gives us 2 Million x 10.00 Profit per game. 20 Million Total So Far _base_d on conservative Numbers alone: WOW = 1 Billion in sub_script_ion Revenues (I AM NOT EVEN COUNTING LICH KING SALES..LOL) Guitar Hero = 200 Million CAP ANNUALLY FOR THE YEAR Call of Duty = 100 Million. (SO conservative it could be half) Assume Call of duty only makes 100 Million this year _base_d on the numbers and annually from hear on out Diablo & SC2 = 80 Million. I am combining both games in the event only 1 comes out. Kung Fu Panda = 20 Million 007 = 20 Million in Sales Total = 1.40 Billion Revenue minimal in 2009 EPS = Exceeding a PE of 10 by 7 Cents currently _base_d on these conservatives. Sweeteners: *Guitar Hero Arcade Sales at 7995 per Machine.Biggest Arcade sale in history according to distributors.Becoming the New Karaoke.http://
www.computerandvideogames.com/art... *All The gaming Strategy guides for COD,WOW,GHERO. *Wrath of Lichking Sales.Obviously will exceed 12 Million..lol Right.Another 200 Million + in Revenue *Madagascar 2. Sales have been blah as with most of these games *Monsters Vs Aliens. Yup Activision is doing this. HUGE MOVIE *Blizzard Sells all sorts of Figures,Characters,Books on the WOW store. Do you think 12 Million WOW obsessed people buy anything? *WOW Burnings and first game still sell fairly well *Starcraft anthology still a decent seller *Diablo Still sells *Guitar Hero III and Guitars Still Sell *Bobby Kotick announcing over 30 Million Songs have been downloaded to Guitar Hero to date at 2.00 a pop *Call of Duty World at war announced Map Packs for Sale soon. *XMEN wolverine Game *DJ Hero. This could be a major hit for Christmas or just a fairly decent seller *NEW GAMES IN DEVELOPMENT IN THE NEXT FEW YEARS All this and ATVI has No Debt. Dominates an industry which is seeing more and more children go on line as well as adults. Human population is growing at a record rate and everybody loves video games. Activision has acquired excellent studios over the years. Activision is also removing 10% of the shares from the Outstanding Float via a buyback Here is the REAL MONEY MAKER. In the future 75% of all New videogames will be downloaded directly to the console. Dramatically reduces Gamestop,Best buy,Amazon Selling fees.Lowers production cost of making physical discs and shipping charges. Point A to B. Margins have no where to go but up. MY Estimated EPS for the next years puts Activision at over $2.00 easily just with its stream of hits and increase in Wii sales and more gamers going online internationally. I would be amazed if they were not bought out in 4 years. At a P/E of 10 ATVI is worth well north of 20.00 I feel like I am robbing someone at this price here. Keep in Mind I was all cash in these 2 crashes. I have traded in and out of ATVI making decent gains. I am all in here. Most of the men on wall street are older and cannot value Companies like this. Even if ATVI never sold Guitar Hero again I would buy this Stock for Blizzard alone. Activision is the bonus. When Activision reports tomorrow I expect you will see a pop north of 25% and this will continue to rise all year.
