Activision Blizzard (ATVI) is a major player in the video-game industry.
The growth of smartphones and tablets over the past decade has been a boon to the video game industry. And a major participant in this growth has been Activision Blizzard (ATVI). Mobile gaming is now a key driver of growth for the gaming industry. This presents a great opportunity for investors interested in video game stocks.
In addition, the game publishers are putting cash to work for shareholders. They are acquiring the best-managed, most profitable, and growing mobile game studios. This option makes more sense for investors. The major game publishers are able to use cash resources to acquire the best mobile game companies that may not be publicly traded. Furthermore, this allows shareholders to benefit from the best-of-breed mobile studios without taking on the risk of owning a thinly traded mobile game stock.
For example, in 2016, Activision Blizzard acquired Ireland-based King Digital Entertainment for $5.9 billion. King is the developer of top-grossing mobile games Candy Crush and Bubble Witch. The deal was highly accretive to Activision’s bottom line. It helped the game company to increase its annual cash flow from $1.2 billion in 2015 to $2.2 billion in 2016. Furthermore, Activision released mobile versions of some of its PC/console franchises such as Call of Duty and Skylanders.
If you are looking for a way to invest in the growth of mobile gaming without taking on high risk, consider buying shares in Activision Blizzard, Electronic Arts, or Take-Two.