Mb (0) – sm Mt (0.8em) – sm "type =" text "content =" Until recently, the shareholders of Activision Blizzard (NASDAQ: ATVI) and Take-Two Interactive (NASDAQ: TTWO) have had many reasons to be satisfied with their investments. However, some setbacks in holiday season sales led to substantial sales for each stock. Stock prices have fallen, but it has also made them more affordable and has increased potential earnings for long-term investors. "Data-reactid =" 11 "> Until recently, the shareholders of Activision Blizzard (NASDAQ: ATVI) and Take-Two Interactive (NASDAQ: TTWO) have many reasons to be satisfied with their investments. However, some setbacks in holiday season sales led to substantial sales for each stock. Stock prices have fallen, but it has also made them more affordable and has increased potential returns for investors over the long term.

Last year, the global video game market generated revenue of about $ 138 billion, up from $ 76.5 billion in 2013. The Newzoo research firm estimates that gross revenues from the The industry will reach $ 180.2 billion in 2021. This context is encouraging and suggests that video gaming spaces offer the opportunity to generate and capture industry growth and deliver strong shareholder performance.

Call of Duty Black Ops 4

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<p class = "canvas-atom text-canvas Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "A screenshot of Call of Duty Black Ops 4: Power outage. Image Source: Activision Blizzard "data-reactid =" 33 "> A screen capture of Call of Duty Black Ops 4: Power outage. Image Source: Activision Blizzard

Do not count this gaming company

<p class = "canvas-atom web-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "The shareholders of Activision Blizzard had to endure some month Disappointing news and strong market performance. The difficult journey began in early November, when the company unveiled its secrets & nbsp;Diablo Immortal – the first mobile opus of the long-standing franchise and one that frequent fans seemed to have little appetite. & nbsp; The importance of unveiling the botched game seems to be magnified when the company reports its third quarter results about a week later and delivered slippage in sales and profits. "data-reactid =" 35 "> Activision Blizzard's shareholders had to suffer a few months of bad news and disappointing stock market performance, and the difficult start was made in early November, when the company unveiled everything. Diablo Immortal – the first mobile part of the longstanding franchise and the one for which hardcore fans seemed to have little appetite. The importance of unveiling sloppy gaming seems to have been magnified when the company released its Q3 results about a week later and reported declining results.

<p class = "canvas-atom web-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "More recently, the company announced its dissolution. with Bungie, and she would not play any role in supporting the developer & nbsp;destiny franchise. Add to the volatility of the market as a whole, and a fairly clear comment explains why the stock has dropped about 35% over the last year. Counting Activision Blizzard, however, would be a mistake. & Nbsp; "data-reactid =" 36 "> More recently, the company announced that it was ending its relationship with Bungie and that it would no longer play any role in supporting the developer. destiny franchise. Add to the volatility of the market as a whole, and a fairly clear comment explains why the stock has dropped about 35% over the last year. However, counting Activision Blizzard would be a mistake.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "ATVI given by YCharts. "data-reactid =" 50 "> ATVI data by YCharts.

Activision Blizzard shares have again posted a very good performance over the past five years, and the essential components of a long-term bullish thesis remain intact. It is undeniable that some of the company's major franchises are losing momentum and that run-down problems have left investors unsatisfied, but Activision Blizzard still enjoys a dominant position in an industry where growth is long.

The story continues

<p class = "web-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "The video game industry has become less cyclical ad-hoc software sales have been discontinued in favor of recurring revenue models, but the increasing and decreasing cycle of large franchises still has a significant impact on publisher performance. It seems that the market has taken the recent downturn to indicate that Activision Blizzard's growth trajectory was derailed, but the company underestimated the opportunities as it continued to move toward the mobile, launched new franchises, expanded into international markets, and explored still nascent companies such as esports and content of augmented reality and virtual reality. The video game industry will only grow and Activision Blizzard remains a major player in the field of long-term investors. The data is trading at about 17 times the expected profits this year. "Data-reactid =" 56 "> The video game industry has become less cyclical, moving from punctual software sales to recurring revenue models, but the declining cycle of large franchises still has a significant impact on publishers' performances.It seems that the market has taken the recent slowdown to indicate that the growth path of Activision Blizzard was derailed.But the company underestimated the opportunities while continuing its progress towards the mobile, launches new franchises, expands into international markets and explores nascent companies such as esports and augmented reality and virtual reality content. The video game industry will only grow and Activision Blizzard remains a long game date in space Investors are trading around 17 times the expected profits this year.

Take advantage of this post-profit opportunity to buy Take-Two

To use some video game languages, the Take-Two Interactive publisher has "grown a lot" over the last nine years – from small to medium to large cap in less than 10 years. A rapid rise like this can be a source of skepticism or caution. But it seems that Take-Two will continue to generate gains for shareholders over the long term, and a recent decline in post-profit shares is an interesting entry point.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "TTWO given by YCharts. "data-reactid =" 72 "> TTWO data by YCharts.

<p class = "canvas-atom web-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "The takeaway has reached a peak in its life in September thanks to the fantastic continuous performance of Grand Theft Auto V & nbsp;and the excitement surrounding the release of Red Dead Redemption 2. & nbsp;& Nbsp; however, the stock lost ground, along with other video game titles and the general market as 2018 progressed, and declined sharply this month following the release of the third quarter results of the first quarter. society. "Data-reactid =" 73 "> Take Two stocks reached a peak in their lives in September, thanks to the fantastic continuous performance of Grand Theft Auto V and the excitement surrounding the release of Red Dead Redemption 2. However, the stock lost ground with other video game stocks and the market as a whole as 2018 progressed, and it declined sharply this month as a result of the release of the third quarter results. the society.

<p class = "canvas-canvas-text-canvas Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Take-Two's sales and profits performed well exceeding market expectations, and the company has actually raised its targets for the year. Red Dead Redemption 2 & nbsp;It's proven to be a resounding success and disappointed expectations, shipping over 23 million copies and staying in a good position to continue posting strong sales and high-margin revenue from online microtransactions. . & nbsp; However, the actions of Take-Two seem to have been negatively affected by the perceived threat posed by the huge popular Epic Games Fortnite& nbsp; and the disappointing results and advice of its competitor & nbsp;Electronic Arts. "data-reactid =" 74 "> Take-Two's sales and earnings performance far outpaced market expectations and the company has in fact raised its targets for the full year. year. Red Dead Redemption 2 It's proven to be a resounding success and disappointed expectations, shipping over 23 million copies and staying in a good position to continue posting strong sales and high-margin revenue from online microtransactions. . However, the stock of Take-Two seems to have been negatively affected by the perceived threat posed by the very popular video game Epic Games. Fortnite and the disappointing results and advice of his rival Electronic Arts.

Red Dead Redemption 2

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<p class = "canvas-atom text-canvas Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "A screenshot of Red Dead Redemption 2. Image Source: Rockstar Games "data-reactid =" 95 "> A screenshot of Red Dead Redemption 2. Image Source: Rockstar Games

<p class = "canvas-atom-canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Some investors and analysts seem to be getting closer to & nbsp;Fortnite& nbsp; sensation as if it came out completely from the left field. The story of the game from flop to phenomena This is certainly interesting, but a story seems to have emerged that the game was created by an inexperienced developer – and that the barriers to entry into the triple-A game market have been significantly reduced. In fact, Epic Games is responsible for extremely successful and influential franchises such as Unreal and Gears of War & nbsp;– not exactly the brave newbie that some industry watchers imagine, and the long-term impact of Fortnite It is more likely that the total audience of players will be expanded compared to the drop of publishers such as Take-Two. "data-reactid =" 96 "> Some investors and analysts seem to be getting closer to the Fortnite sensation as if it came out completely from the left field. The story of how the game went from flop to phenomenon is certainly interesting, but a story seems to have emerged that the game came from an inexperienced developer – and that the barriers to entry into the triple game market -A have now been deleted. greatly reduced. In fact, Epic Games is responsible for extremely successful and influential franchises such as Unreal and Armament of war – not exactly the brave newbie that some industry watchers imagine, and the long-term impact of Fortnite is more likely to be an expansion of the total audience of players than the fall of publishers like Take-Two.

<p class = "canvas-atom web-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "While it must compete with" other companies for time and expense players, the market seems to misinterpret the Fortnite situation, and Take-Two's business never seemed so strong. Its core Grand Theft Auto, Red Dead Redemption, and NBA 2K the franchises are in great shape and the company is expected to launch another big triple-A title before the end of its next fiscal year. Along with Activision Blizzard, Take-Two should also capitalize on its increased presence on mobile platforms, a growing global audience for gaming and the growth of l & # 39; eSports. The shares appear to be worth 19 times the expected profits this year. & Nbsp; "data-reactid =" 97 "> While it must compete with other companies for the time and expense of its players, the market seems to have misinterpreted the Fortnite situation, and Take-Two's business never seemed so strong. Its core Grand Theft Auto, Red Dead Redemption, and NBA 2K the franchises are in great shape and the company is expected to launch another big triple-A title before the end of its next fiscal year. Along with Activision Blizzard, Take-Two should also capitalize on its increased presence on mobile platforms, a growing global audience for gaming and the growth of l & # 39; eSports. The stock looks interesting at trading at 19 times the expected earnings this year.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = " More from The Motley Fool "data-reactid =" 98 "> More from The Motley Fool

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Keith Noonan holds shares in Activision Blizzard and Take-Two Interactive. Motley Fool owns shares and recommends Activision Blizzard and Take-Two Interactive. The Motley Fool recommends Electronic Arts. The Motley Fool has a disclosure policy."data-reactid =" 106 ">Keith Noonan owns shares in Activision Blizzard and Take-Two Interactive. Motley Fool owns shares and recommends Activision Blizzard and Take-Two Interactive. The Motley Fool recommends Electronic Arts. Motley Fool has a disclosure policy.