Market Cap: $36.4 billion
Change from Last Year: -38%
This Year’s Rank: 4
Last Year’s Rank: 3
Top Exec: Robert Kotick, chief executive
Headquarters: Santa Monica
How They Got Here: For years, Activision rode the video gaming wave with its signature franchise, “Call of Duty,” and a flow of other new games. But over the past year, “Call of Duty” has lost some steam. Then in May, video game website Kotaku reported that the next game in the “Call of Duty” franchise would have a two-year development cycle instead of the traditional three years. That news sent Activision’s share price down 9% as analysts expressed concerns that the shorter process could hurt the quality of the game. Even more worrying to investors was the January parting of ways between Activision and Bungie Inc., developer of the hit “Destiny” video game franchise. Activision had been handling distribution rights for Destiny, but it sold those rights back to Bungie. “They now have a hole in their (video game) portfolio, and their Blizzard division doesn’t have any new releases this year,” said Michael Pachter, an analyst with downtown-based Wedbush Securities Inc. All of this has driven Activision’s stock price down nearly 40% over the 12 months ending June 28. That drop pushed Activision down a notch to No. 4 on the Business Journal’s public companies list.
Where They Go Next: The focus has already turned to Activision’s 2020 video game release schedule, which includes the next installment of “Call of Duty.” Also key will be whether trade tensions with China ease enough to allow Activision greater access to that market.
Quotable: Activision management took full responsibility for the company’s light release schedule in 2019, and we think that some part of the share price rally since (the June E3 trade show) is attributable to investors warming up to the (company’s) story.” — Michael Pachter, analyst, Wedbush Securities.