Activision Crashes as ‘Diablo’ Mobile Pits Analysts and Gamers
(Bloomberg) -- Activision Blizzard Inc. shares were hammered as video gamers took to social media to criticize a new mobile game that they say failed to live up to the storied franchise.
The new “Diablo Immortal” mobile offering fell short of some fan expectations for the popular desktop games. Players lashed out on Twitter and in the comments section of the YouTube trailer with the hashtag, #NotMyDiablo. There’s even a petition on change.org to cancel the launch that has over 31,000 supporters. Activision sank as much as 7.2 percent, on track for its lowest close since January.
“I’m not against having a mobile game too, but not INSTEAD of a PC game, We’ve been waiting for far too long for another Diablo 3 expansion or better yet, Diablo 4,” signed one petitioner. While another called it an “absolute slap in the face of all the fans who stuck with blizzard through the mess that was diablo 3 , hoping that we’d finally get a good diablo game.”
The criticism stands in contrast to sell-side analysts that applauded the company’s efforts and defended its rationale.
“Diablo was supposed to be Blizzard’s first shot on goal into the big global mobile game market,” Jefferies analyst Timothy O’Shea wrote noting the criticism from Blizzard’s PC fanbase. “Games like these attract large, harder core mobile audiences in Asia and the Diablo franchise is popular in the US, China, Europe and Korea,” he continued.
The video game’s trailer on YouTube racked up more than 2.9 million views in the last three days, however more than 431,000 viewers elected to dislike the video compared to 16,000 likes. Comparatively, video-game rival Take-Two Interactive Software Inc.’s recent smash hit Red Dead Redemption 2 notched more 16 million views for its trailer since its release, while recording less than 10,000 dislikes.
Activision Blizzard representatives didn’t immediately respond to voicemails seeking comment.
The announcement comes shortly after the debut of “Call of Duty: Black Ops 4”, which was released in October and posted initial sales figures that appeared to fall short of some analyst expectations, while others were more bullish on strong engagement trends.
Morgan Stanley’s Brian Nowak suggested “Diablo Immortal” could eventually have more than 200 million monthly active users, and that it could generate annual earnings of as much as $2.52 a share.
Wedbush, one of 20 sell-side firms that carry a buy-equivalent rating and also holds a Street-high 12 month price target of $100, estimated the game could contribute annual revenue of up to $300 million after its roll out, and that it “should expand the franchise’s audience to hundreds of millions of players.”
The partnership with NetEase, analysts added, “signals that Blizzard seeks success in western and eastern markets, with gameplay elements for core enthusiasts and the previously-uninitiated.”
“We expect Activision Blizzard to outpace its peers with its in-game monetization, and expect dramatic growth in its mobile business as it launches new titles based upon its successful PC and console games,” Wedbush wrote.
©2018 Bloomberg L.P.