Piper Jaffray analyst Tony Gikas said that retail publishers "remain overly optimistic" as he downgraded stock in Call of Duty house Activision from "buy" to "neutral," citing large management stock sell-offs and "excessive expectations."

According to Gikas' note, posted on StreetInsider.com, the analyst lowered his price target on Activision shares to $12 from $13. "Company management teams remain overly optimistic," Gikas said, adding, "Game hardware and software sales have been a colossal disappointment for eight months."

Activision is readying the launch of Call of Duty: Modern Warfare 2 from internal studio Infinity Ward. The publishing entity, which also includes World of Warcraft house Blizzard Entertainment, reportedly said it intends to make Modern Warfare 2's launch the "biggest entertainment launch of all time."

According to a separate report on Barron's tech blog, Gikas' confidence is "voided" by Activision management's decision to sell 20 million company shares in the past six months.

He said Activision's management, led by CEO Robert Kotick, is "impressive," but "late-cycle demand variability makes it challenging to provide sustained growth. The fact that no next-generation game consoles are on the horizon makes it difficult to invest in the category."

And overall, he said he feels video game companies overall have been too optimistic. "Almost every management team in the sector has been dead wrong on category sales all year," Gikas wrote. "We cannot stress enough that this cycle is driven by the casual gamer, who buys significantly fewer games than avid gamers did in prior cycles."

"As for the publishers, our thesis suggests that large publishers will transition to a 'slow-growth, high-return, low asset growth' consumer products business model during the next few years."