Gamasutra is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

Gamasutra: The Art & Business of Making Gamesspacer
arrowPress Releases
If you enjoy reading this site, you might also want to check out these UBM Tech sites:

Analyst:  'Excessive Expectations' From Retail Publishers, As Activision Downgraded

Analyst: 'Excessive Expectations' From Retail Publishers, As Activision Downgraded

October 29, 2009 | By Kris Graft

October 29, 2009 | By Kris Graft
More: Console/PC

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, 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."

Related Jobs

Question — Tiburon, California, United States

Question - South Park - Lead Level Designer (WFH/Remote)
Skydance — Remote, California, United States

Senior World Artist
Skydance — Santa Monica, Los Angeles, California, United States

Game Producer - Game Team
Skydance — Santa Monica, Los Angeles, California, United States

Senior Game Producer - Game Team

Loading Comments

loader image