Activision doesn't have a lot on their plate, at least in recent times after the closure of the Guitar Hero series. The only real big hitters are the Call of Duty franchise and Blizzard's titles, but the latter only ever sees release once in a few years, unlike Call of Duty's annual shindig.
Regardless, Sterne Agee analyst Arvind Bhatia believes that Call of Duty will remain key to Activision's revenue generation, saying that revenue per user may potentially double if users increase their spendings on the series, thus Activision could see a pretty big pot of gold at the end of the yearly rainbow.
"Currently, the biggest investor concern on ATVI revolves around the concentration in the company's portfolio (Call of Duty, World of Warcraft). However, management believes focusing on monetizing the Call of Duty franchise further is the best use of its resources. Over time, management believes the ARPU from Call of Duty (initial sale + map packs) could double from the current $100 to $200 for at least a meaningful portion of the 27 million players currently engaged in playing Call of Duty online," said Bhatia.
"If we assume 20% of the current online players (~5.5M) double their spending on Call of Duty over time, that would be an incremental $500M in annual revenue at fairly high margins. We think this is the key to the longer-term bull thesis on ATVI," he added.
What does this mean for the Call of Duty franchise? Probably more $15 DLC packs.
Bhatia also points out the launch of Diablo III, Blizzards new MMO, Bungie's new IP and the introduction of Call of Duty in China will add to Activision's "areas of potential growth."
Source: Industry Gamers