Activision Q4 2008 forecast (ATVI)

Practicing some sales forecast on my free time. So I did it on my favorite topic. Game publishers. For those of you not interested in analysis, I’ll jump straight to the point.

I expect Activision Blizzard to make $933.705 million + $233 million (subscription)  = $1,166 billion dollars in the months of October to December 2008.

The calculation is done based on sales projection of 4 major games: COD: World at war, GH: World tour, WOW: Wrath of Lich King and Kung Fu Panda.

• COD : 7,695,324 copies generating $461.719 millions ($60/copy)
• GH   : 3,656,947 copies generating $255.986 millions ($70/copy worst case scenario)
• WOW: 4,800,000 copies generating $192,000 millions ($40/copy)
• PAN :    600,000 copies generating $  24,000 millions ($40/copy)

The sales projection are done based on the sales growth/contraction of previous years on similar franchises. Assuming operation margin of 15% continues throughout the quarter, operating income should be $175.005 million dollars or $0.132 per share. Which brings the total year revenue to $0.21/share. Which makes its price 47 times its earnings power.

COD

Last year’s final 5 week sales approximation (copies):

1. 300,000
2. 300,000 (+0%)
3. 500,000 (+66.66%)
4. 600,000 (+20%)
5. 300,000 (-50%)

COD has already sold 3,689,620 before this week. This week’s sales figure: 706,913 so projecting it to last 4 weeks of this year.

1. 706,913
2. 1,178,141
3. 1,413,769
4. 706,884

Projected sales 4,005,707 copies.

Year end projection is: 7,695,327 copies

A simple check against total consoles installed and past franchise’s total number sold indicates that the fan base is indeed this big.

GH

Last year’s final 5 week sales approximation (copies):

1. 250,000
2. 300,000 (+20%)
3. 350,000 (+16.66%)
4. 400,000 (+14.3%)
5. 250,000 (-37.5%)

GH has already sold 1,937,312 before this week. This week’s sales figure: 330,693 so projecting it to last 4 weeks of this year

1. 396,831
2. 462,943
3. 529144
4. 330715

Projected sales 1,719,635 copies.

Year end projection is: 3,656,947 copies

WOW

WOW has already sold 2,800,000 before this week.

Year end projection is: 4,800,000 copies (Figure based on the fan base who installed Burning Crusade)