Activision, ‘Battlefield 2042’ hurt video game stocks

Video game stock took a dip Monday as the management of Activision Blizzard Inc. and Electronic Arts Inc’s new game. face criticism.

After more than a week of calling Activision

CEO Bobby Kotick stepped down, MKM Partners analyst Eric Handler joined the march on Monday morning. The analyst downgraded Activision stock to sell from neutral in a note titled “Major changes needed at Bobby built house,” referring to Kotick.

Handler wrote that it appears reports of sexual misconduct and discrimination at the video game publisher are “deeper than initially feared.”

“Furthermore, we do not believe these problems will go away until a clear solution is reached, beginning with the dismissal of CEO Bobby Kotick,” Handler said. “According to what we read from the press and social media, staff morale is very low, potentially affecting not only the progress of the game development but also the quality. Business partnerships are also subject to risk.”

Last week, the Journal reported that Kotick had known about sexual harassment and misconduct at the video game publisher for years, prompting a second employee to walk and pushes stocks to their worst close in over a year. While stocks were down only about 1% on Monday, they were down 21% for November alone.

Sunday afternoon, The Wall Street Journal reports that Kotick has told senior managers he will consider stepping down if years-long cultural issues of sexual harassment and discrimination cannot be remedied “quickly”.

Issues at Electronic Arts

is about another industry issue: The quality and progress of game development. EA released “Battlefield 2042” on Friday, and the game was quickly considered one of the worst rated games in online gaming website history Steam. EA stock fell more than 5% on Monday.

At last checked, only 26% of the 37,169 reviews for the game were positive, with most of the negative reviews complaining that the game was incomplete, had many bugs, and lacked many features that users desired fan. “Battlefield 2042” was originally slated to premiere in October, then supposed to be delayed to 2022, which will then be released in November.

However, the game ranked as the third best selling game on the site. That was noticed by Jefferies analyst Andrew Uerkwitz, whose buy trades on the EA.

“We were looking at Steam user reviews and found that they are a better place to complain than to rate games,” Uerkwitz said. “‘Battlefield 2042’ has ranked near the bottom based on reviews, but is currently at the top of the bestseller list.”

Publishers have been stuck between a rock and a hard place when it comes to releasing big games since CD Projekt SA’s

The long-awaited and overdue “Cyberpunk 2077” release last year forced distributors like Sony Group Corp.

to offer full refund due to low quality.

Activision Blizzard also said earlier this month it will delay the release of two of its highly anticipated gamesand Take-Two Interactive Software Inc.

after last week raw start its “Grand Theft Auto: The Trilogy – Definitive Edition.” Take-Two stock fell 2.5% on Monday.

Read: Amazon Video Game Moderators on ‘New World’ Success and Why People Go for Roblox

However, Jefferies’ Uerkwitz seems more interested in Roblox Corp.

in his Monday note released by the new social game company “Nikeland,” where players can customize the playing field and get Nike Inc. free of charge
+ 0.89%

Accessorize their avatar by going into the in-app gallery.

“From a branding perspective, Roblox has made it clear that the partnership is not going to end anytime soon,” Uerkwitz said. “In fact, it looks like the company is changing the way brands see marketing spending. By creating a branded experience, you are giving the user the option to participate in an advertisement; eyeball for advertising versus advertising for eyeball. ”

While the industry-leading Roblox stock is down 9%, the stock is still up 46% in November alone. The only other stock in the video game sector that has also performed well this year is Unity. Software Inc.
posted a 19% gain but fell 5% on Monday. Meanwhile, the S&P 500 index
+ 0.59%

up 2.5% in November, while the iShares Expanded Software-Technology Sector ETF

is a decrease of 2.3%. Activision, ‘Battlefield 2042’ hurt video game stocks


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